05/08/2010 - 00:00

$80m price tag on Raine Square

05/08/2010 - 00:00

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SARACEN Properties and Probuild have finalised negotiations over the completion of Raine Square, six weeks after WA Business News revealed that Probuild had been selected as the preferred builder.

$80m price tag on Raine Square

SARACEN Properties and Probuild have finalised negotiations over the completion of Raine Square, six weeks after WA Business News revealed that Probuild had been selected as the preferred builder.

Work will be in full swing by the end of the month, as Probuild mobilises its workforce to complete the $500 million commercial and retail development.

Saracen Properties managing director Luke Saraceni confirmed this week that negotiations with Probuild over the final construction cost of the project had been completed.

Mr Saraceni would not be drawn on the final value of the contract with Probuild, only describing it as a “significant amount”.

But according to a building application lodged with the City of Perth early last month, the value of the works to complete the Raine Square project is $80 million.

Mr Saraceni said he anticipated Raine Square to be complete by the end of June next year.

Probuild has come full circle at Raine Square, after it entered the Western Australian construction market in 2006 when it won the forward works contract for the tower.

“We were actually instrumental in them coming to Perth because they won our job, and then they of course got the job [at one40william] across the road,” he said.

Mr Saraceni said he was looking forward to partnering with Probuild once again on the project.

“They’ve just finished one40william successfully, so they’ve proven that they can do the work,” he said.

Saracen Properties was forced to look for a replacement builder for Raine Square in February this year after the original builder, Melbourne-based Salta Constructions, walked off the site.

Salta cited a contract dispute surrounding non-payment for variations to the original contract and the effect this could have had on subcontractors as its reason for terminating the contract.

In April, Salta lodged a writ seeking damages for loss of profit against Westgem Investments, a company under the Saracen Properties umbrella, in the Western Australian Supreme Court.

Saracen Properties then lodged its own court action to secure $10.6 million in bank guarantees from Salta.

Salta later announced it was shutting down its construction division nationally to concentrate on “more profitable” areas of its business, while the litigation is ongoing.

Mr Saraceni said the lengthy delay between Salta terminating its contract and signing up a new builder, which he originally estimated would last less than a month, had been due to additional requirements from his banking partners.

“We had to organise additional funding and we’ve had to put in additional equity and that’s taken a lot longer going through those processes than we had anticipated,” Mr Saraceni told WA Business News.

“I never had any doubt that it was going to start again; it was just the frustration at how long it was taking.”

 

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