Westland’s mayor is fuming as court action by Scenic Hotel Group delays flood-protection work in the vulnerable tourist town
West Coast leaders are accusing the country’s largest New Zealand-owned hotel chain of holding up work to save Franz Josef from another disastrous flood.
Scenic Hotel Group is suing West Coast Regional and Westland District councils over the $30 million loss it claimed in 2016 when the Waiho (Waiau) River burst its banks and tore through its Franz Josef Glacier hotel buildings.
It’s understood the company received an insurance payout, but the high court action began in 2019 and remains unresolved.
And last month the company refused to sign off as an affected party on resource consents needed to upgrade stopbanks and protect the township in a $12million project funded mainly by the government.
Contractors are ready to start work on the long-awaited project and the West Coast Regional Council was hoping to avoid notifying the consents to speed up the process.
The other affected landowners - thought to number 17 - have signed off on the work, it says.
But chief executive Heather Mabin says the consents will now have to go through a limited notification process, a formal hearing and further delays, with Scenic Hotel Group the only hold-out.
“We are incredibly disappointed that the process has taken so long; and then to find that its lawyer lodged an objection on day 19 of the 20-day period to submit. That shows a total disregard for the Franz Josef community and its welfare.”
Neither company lawyer Simon Johnston nor chief executive Karl Luxon responded to Newsroom’s request for comment.
But in a submission to the council, Johnston says the information the council has provided on the planned work is inadequate.
“While Scenic Hotel Group generally supports the proposal to increase the height of the stopbanks by 2m, add rock armour and construct new stopbanks, it is concerned there are inadequate safeguards to protect the property and interests of SHG and to ensure its banks and insurers will lend on and insure a new hotel long-term.”
The company also asks for survey plans and details of exactly where in the river bed gravel will be extracted along with the assurances of “independent experts” that SHG property won’t be damaged in the building process.
Assets and lives at risk
An indignant Westland mayor Helen Lash says the company is effectively holding the community to ransom.
“Franz Josef people are desperate to protect their lives and assets and they’re fuming. As we just saw in Auckland, it would take just one big flood to wipe them out and it’s like these guys are using our community as a pawn in their fight with the councils.”
Scenic Hotel Group had previously been a staunch supporter of Franz Josef and the West Coast, Lash says.
“That changed after the big flood but it’s hard to know why it’s stalling on this. Its own assets are at stake, its other Franz Josef hotels. We need those stopbanks up as soon as possible.”
Mabin says the company might share West Coasters’ sense of urgency if its owners lived locally.
“None of the parties to the Scenic Hotel Group decision live on the Coast. Owner Lani Hagaman, CEO Karl Luxon and the company’s lawyers are all based in Christchurch.”
The regional council’s acting chair, Peter Haddock, says talks are taking place with the company to try to convince it to withdraw its objections.
“We know there’s this court case going on but I believe the company was paid out long ago for the 2016 event and this is about its insurers wanting to sheet home liability. The stopbanks are a separate issue.”
Further delays could put the stopbanks’ funding at risk, Haddock fears.
The work was approved more than two years ago as a “shovel-ready” Covid stimulus project, with $9 million coming from the then Provincial Growth Fund and the rest coming from ratepayers.
And the shovels have been ready for long enough, he says.
“Franz Josef people want to see action and so does the government. The risk is that if it stalls for too long the money will be directed elsewhere - Auckland, for instance. There’s certainly the demand.”
Contractors expect to begin preparatory work this month on confining the river by clearing the main channel and diverting it away from the banks.
“The diversion work, while it needs to be undertaken, will also help with the stopbank work, saving time and money down the track,” Mabin says.
Made with the support of the Public Interest Journalism Fund
