New Zealand’s Fletcher Building said on Friday its unit Iplex Pipelines Australia and the Western Australian government had agreed to address plumbing failures in some homes built using pipes made by the unit, sending its shares up 7%.
Last year, Fletcher had said that nearly 1,500 of the 15,000 houses constructed in Western Australia (WA) using Iplex’s pipes had faced plumbing failures between mid-2017 and mid-2022.
Fletcher will record a provision of about A$155 million ($105.38 million) in its fiscal 2025 results if the agreement is finalised, it said in a statement on Friday.
The WA government said it would extend the time for affected homeowners to lodge complaints relating to the pipe plumbing failures only with its building commissioner to 15 years post-completion, from six years earlier.
The repairment programme will be implemented through the affected homes’ builders, who will undertake additional works like replacing ceiling pipes, with temporary accommodation provided to homeowners for whom a full home re-pipe is carried out.
Iplex Pipelines and the WA government will bear the cost of the programme jointly, with the government’s contribution of 20% capped at A$30 million.
While most of the affected builders agreed to the agreement suggested by the government and Fletcher, the Buckeridge Group of Companies (BGC), which has also taken legal action against Iplex AU, is yet to join in.
While BGC is open to join the agreement, its own litigation against Fletcher’s unit prevents it from doing so, the Australian homebuilder said in a statement.
BGC has spent more than A$18 million of its funds to rectify the issues relating to Iplex pipes, it added.
BGC had earlier blamed Fletcher for downplaying the gravity of the incident and delaying a product safety recall.
Fletcher said the leaks were due to improper installation rather than a construction flaw.
Source Homevior.in
