Jewel towers at Surfers Paradise — inside Yuhu Group, Multiplex row

SOURCES inside the work halt that has hit the Jewel triple towers for a fortnight say developer Yuhu Group is ‘not the villain here.’

THEORIES abound on the real cause for the past fortnight’s work halt at the Jewel triple towers project site.

Half the 900-strong labour force have been let go, according to the construction union, with work to resume on Monday.

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It is unclear how much work is to be carried out this time on the project, scheduled to be finished in mid-2019. Contractors say some crews will take just a few weeks to finish off half-completed jobs.

Aerial view of Jewel worksite after workers walked off the job last week. Picture Glenn Hampson

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Chinese developer Yuhu Group has repeatedly said a redesign of some areas is still being finalised and will result in new tenders for some work – but Australian-based builder Multiplex remains its “major project partner”.

Multiplex, an industry giant with projects around the world, has said little of any consequence and it has emerged their statements need approval by Yuhu Group.

One theory is sales of the 512 apartments are slower than expected so work has been delayed on them until the market picks up and the focus is finishing the 169-room hotel.

But another theory – and it is backed by multiple sources close the project – is the build contract that Multiplex struck with original developer Wanda was too highly priced for Yuhu Group to stomach. Further, that Yuhu Group, are more savvy in the Australian building market than Wanda.

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The $1.4 billion triple towers project has ground to a halt for a fortnight. Picture Glenn Hampson

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“The key question is whether Wanda’s design was too expensive and was Multiplex as build partner proposing a fair price?” a source closely involved said.

“I thought Yuhu making design changes was just them being precious, imposing their own ideas.

“But what I’m being told is they are better attuned to the Australian experience of designing, building and costing.

“Yuhu are not the villains here – they don’t want to be putting anyone out of work. But Yuhu Group are basically saying ‘We didn’t come down in the last shower’.

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Developer Yuhu Group has consistently said it wants to finish the hotel and apartment towers with beach-edge pool and restaurant areas to the highest standard. Picture Glenn Hampson

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“Yuhu Group are not going to under spec this but they are going to do it for the right price so they can sell it.”

Yuhu Group have consistently said they want to finish Jewel to the highest standard.

A source close to the Huangs who run Yuhu Group said they “issued a directive to the project team to deliver a hotel that will sit in Australia’s top 10 in terms of amenity and guest experience”.

Jewel apartment sales sit at about 90 of the 512 or 18 per cent, with Yuhu dropping prices on two-bedrooms.

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Workers from the Jewel development protesting at the Jewel International Kite Festival at Surfers Paradise recently. Picture: Jerad Williams

Multiplex didn’t respond to questions about the speculation on the build price.

A Yuhu Group spokesman said: “In terms of the (price) speculation about the project we have nothing to add.

“We are pleased work is set to recommence and remain totally committed to delivering a high-quality project.”

A contractor was more forthcoming on the build price for Jewel, dubbed “one of the most over-specced buildings ever designed”.

The contractor, sweating on outstanding bill payments for pre-ordered materials, said it would not surprise him if Multiplex set the price high. The build was “high-risk, high price” because of the complexity of design, he said.

Gold Coast Mayor Tom Tate and Yuhu Group Australia director, Jimmy Huang at Surfers Paradise earlier this month. Picture: Jerad Williams

“I quoted relatively high because the risk is high. We stood our ground and said ‘We’re not going to do it for cheaper because it’s so risky’. Multiplex would have done the same,” he said.

“For Multiplex it is expensive and risky because of the thing they’re being asked to deliver. And if it’s fixed price and there are delays, design issues and you need extra people doing over time then your costs blow out quickly.”

He had little sympathy for the theory Yuhu were more savvy than Wanda and baulked at the Multiplex contract, saying Yuhu should not have paid $1.13b if that was the case.

“Yuhu would’ve been privy to all the contracts. Surely when they went to buy, they would have gone ‘We’re paying less than $1.13b.”