Checkpoint - EQC was expanding so quickly it's inevitable some building assessments were substandard, says former Fletcher's boss Mark Binns.
Checkpoint with John Campbell was leaked a copy of the contract between EQC and Fletcher Construction for the management of the Canterbury Home Repair programme, signed by EQC chief executive Ian Simpson, and Mr Binns, Fletcher Construction's former infrastructure chief executive.
Speaking to Checkpoint, Mr Binns described an under-resourced and off-guard EQC trying its best to cope with an unprecedented event.
He said the EQC was caught out by the massive scale of the Christchurch quakes, and political timeframes on how quickly the work could be done were unrealistic.
"We started talking to EQC and the government straight after the earthquake ... EQC was probably not in a ready state to deal with such a large, catastrophic earthquake"- former Fletcher Construction chief executive Mark Binns
"During the negotiations there was some pushback from either EQC or Mr Brownlee's office where they asked Fletcher Construction to take on a higher degree of risk," he said.
"This was so massive we were going to have to take on resources that we had never worked with before ... that were offshore," he said.
"From a commercial point of view it would have just been plain stupid for us to accept."
Former Fletcher Construction boss Mark Binns Photo: RNZ
He said the office of the minister responsible for EQC at the time, Gerry Brownlee, had been trying to suggest Fletcher's could do the whole scope of works, including building assessments, within a fixed period of time.
"I won't say what that period of time was but it was relatively short," he said.
"I would say the expectations were unrealistic."
"And we pointed out to them that there was going to be major issues gearing up ... identification of subcontractor resources, getting into the area, accommodating the people. It was clearly going to take a significant period of time, there was going to be issues with insurers.
"That's why we pushed back and said 'look, it's just impossible to do it within that time period', so we went according to the timeframe that we thought we could complete the project in an expeditious but appropriate manner."
He said the EQC indemnified Fletcher's against any such action, and he would not have signed the contract if they had not. So Fletcher refused to take on the risks associated with the full scope of works, and EQC ended up running building assessments.
Assessments done too fast
Mr Binns said some assessments of property damage were done too fast, and by unqualified people.
"When they were getting assessors in to do the scopes I think it's fair to say there were some teething issues," he said.
However, he said that was perhaps understandable considering how rapidly it was becoming a much larger organisation.
"EQC was building up and going from something like 20 people to something like 700," he said, although he later said he might be remembering it wrong and it could have been more like 400.
"When you resource up so quickly and you've got so much pressure, you're bringing so many people on board. Statistically, yes, you're probably ... going to get some people who are probably below the level required.
"You would hope that those people would be identified relatively quickly and replaced."
"It's probably understandable that they were going at a heck of a pace. Imagine what the political fallout would have been if they had been slower."
EQC unlikely to be able to sue Fletcher's
National's EQC spokesperson Stuart Smith yesterday suggested on Checkpoint that EQC should sue Fletcher Building if there's compelling evidence the contractor was responsible for a large number of botched post-earthquake repairs.
However, the contract's indemnity clause essentially exempts Fletcher Construction (FCC) from claims relating to its work under the contract.
"EQC indemnifies FCC for all costs and expenses FCC may suffer and for any claims made against FCC in connection with FCC carrying out its obligations under this agreement," read section 23.1 of the signed contract.
Mr Binns said it was unlikely EQC could sue Fletcher's over substandards repairs.
"I did used to be a lawyer ... precedent is non-existent, I would think that is a very long bow to draw.
"In legal cases there's always some chance ... but I would've thought on the contract as I remember it and my understanding of contract law, that it would be a very difficult claim to make."
He said he would not have signed the contract if there was not the indemnity clause.