TVNZ defends extra spending on HQ refurbishment, refuses to confirm final cost

Thursday 3rd December 2015

Television New Zealand has defended the renovation of its Auckland headquarters, which is over budget, while refusing to confirm the final cost.

Chair Joan Withers, who was last month named supreme winner at this year's Women of Influence awards, said the additional cost of the renovation was "less than $20 million," but she wouldn't be more specific when appearing at the state-owned enterprise's annual select committee review.

Her response came after Labour MP Kris Faafoi, a former TVNZ journalist, said he had heard the cost blowout was bout $25 million, on top of the $35 million initial cost of the renovations which began last year, taking the total cost of the project to $60 million.

That was denied by Withers, who said the additional costs "are not that high," but refused to confirm how much the renovations would cost in total after repeated questions from Faafoi.

Withers said the SOE had been given a guaranteed maximum price by contractor Fletcher Building, which she declined to disclose.

"The board were sure we had an envelope of capital to improve the building," Withers said. "With recycling of capital and dividend forgiveness, we have not had to take on debt to fund this renovation."

TVNZ made $10.7 million from selling offices on 85-91 Hobson St to SkyCity Entertainment Group in September 2013, after selling its other offices at 93 Hobson Street to SkyCity in July 2013 for $5.3 million. The land is being used for SkyCity's new convention centre.

In its 2013 financial report, the company said "due to the significant capital cost of this refurbishment, the shareholding ministers have advised that they will forgo future dividends to a maximum amount equivalent to approved cash requirements for the refurbishment and relocation costs less the amounts received for 85-91 Hobson Street."

The media company suspended dividends for two years, but declared a dividend of $8.3 million for the 2015 financial year, payable next year.

Withers said that upgrading the building was "always an iterative process", and that the 25 year old building had a number of issues which needed to be addressed, including seismic strengthening and new health and safety regulations.

BusinessDesk.co.nz

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