Falling through the cracks: Sydney’s Opal Tower debacle
No one heard the first one, soft and low, like an eggshell cracking. But then came the bang.
The Ancient Greeks believed opal came from the tears of Zeus. When opal turns to tears again it will … bring down Australia’s booming high rise apartment business.
— From the Opal Tower Sydney Residents Facebook page
No one heard the first one, soft and low, like an eggshell cracking. By early afternoon, the splintering in the wall on the city-facing side had escalated to an erratic tck tck tck, louder and growing more insistent. It was Christmas Eve and the residents of Opal Tower were busy, caught up in the bustle and thrill of festive preparation. Presents to wrap. Fridges to stock. This was to be their first Christmas in the sleek new 36-storey building, considered a jewel in the residential crown of western Sydney’s Olympic Park, the events precinct being developed as a dynamic, family-friendly lifestyle hub. The $165 million high-rise had opened four months previously; many of those in its 392 luxury apartments had only just finished unpacking.
Then came the bang. The fissure on the 10th floor was only millimetres wide but, with the weight of thousands of tonnes of concrete, steel, glass and humans bearing down on it, the sound it made as it burst was, according to one upper-floor resident, “like a cannon going off”.
At first they thought: bomb. Police were called at 2.45pm and an alarm sounded throughout the building, shrill and urgent, warning the 300 or so residents who were home at the time to evacuate. Emergency services had found a large crack along an internal concrete support wall and the entire building had shifted slightly, leaving doors jammed shut and people trapped inside. “That’s when the word ‘collapse’ was first used,” says Shady Eskander, the tower’s body corporate chairman.
Soon firefighters and public works engineers in hi-vis jackets were swarming the building and the forecourt was a chaos of barriers and orange traffic cones, surveyors’ tripods and milling people. “They moved us 100m away, then 200m away, then way over the concrete bridge and into the park on the other side of the road,” says Laurie Smith, who’d moved into Opal Tower with his wife Cathy and their two dogs only three days before. Tina Tong, who shares an upper-floor apartment with five people, including her two-year-old son, recalls seeing carers from a nearby childcare centre rolling cots out the door and over the footbridge, three or four babies to a cot. An elderly man, fresh from back surgery, struggled along on crutches.
Eventually an exclusion zone with a radius of 1km was established around the stricken building, forcing another 3000 people out. Roads and a nearby train station were closed, water and gas services shut off, and the tower was isolated from the power grid. That night, the TV news images went around the world: rivers of people, wheeling suitcases and clutching pillows, walking away from their homes and into an unknowable future. Some were lugging cat carriers; others had grabbed an ad hoc assortment of plastic bags and house plants. One kid with a teddy bear looked particularly confused. Some Christmas Eve.
It’s a blustery day nearly three months after the initial evacuation when I share a pizza with Eskander on the ground level of Opal Tower. Christmas has come and gone, as have the New Year’s Eve fireworks that residents had anticipated watching from their sky-high balconies. Children are back at school. The seasons have changed and an autumnal blush colours the mangroves and parklands of the adjacent 40ha Bicentennial Park.
Incredibly, although the daily headlines have ceased, nearly half of the tower’s apartments are still not fit for reoccupation and hundreds of people remain in temporary digs. After initially being given the all-clear to return just after midnight on Christmas Eve, residents were evacuated again days later when the full extent of the damage was discovered. They were told they’d be out for 10 days. That was on December 27, and the homecoming timeline remains hazy. Some, like Bryan Tan, a 32-year-old owner-occupier living out of a serviced apartment in Chatswood with his wife and his mother, have now been off-site longer than they spent in their brand new home.
I feel safe enough sitting here, below 117m of high-rise, spruiked upon opening as an architectural marvel, “the ultimate in luxury and lifestyle”. Stabilisation work began almost immediately back in December, with the owner’s corporation engaging independent engineering firm Cardno as overseer. No fewer than 900 solid steel girders, each a foot wide and weighing 300kg, were installed on the first 10 floors and in the basement. On February 19, three engineering experts engaged by the NSW Department of Planning wound up an eight-week investigation, delivering a 36-page report that asserted the building was “overall structurally sound”. It wasn’t about to collapse in a pile of dust and rubble. And yet…
That report contained disturbing revelations in light of the high-density development boom currently sweeping through the nation’s capital cities. It found that a number of design and construction issues, including “non-compliance with national codes and standards”, had caused major damage to the tower. Some precast walls were constructed of “lower-strength concrete”, with “under-designed” horizontal support beams, called hob beams, prone to bursting under extreme pressure. Changes made after the initial design meant some joints between the hob beams and internal panels had been only partially grouted, significantly raising the levels of stress in the building. There were photos, too: mint-green plaster crumbling off walls, broken and exposed concrete, cracked floor slabs and reinforcement bars bowing under pressure.
The findings sent a jolt through NSW’s $25 billion construction sector and beyond. How were these defects possible? This was an expensive apartment complex, with prices starting at $800,000 and ranging up to $2.5 million for the dual-level penthouses. If buyers couldn’t trust developments at the top end of the market, what could they trust? Urban consolidation is changing our cityscapes at breakneck speed; Opal Tower’s problems have given plenty of people the jitters.
Urban Taskforce chief executive Chris Johnson is a former government architect and former executive director at the NSW Planning Department who has been tracking the Opal Tower saga closely. He finds it “staggering” that cracks could appear in a four-month-old building that would have had to pass checks by the Sydney Olympic Park Authority and the NSW Department of Planning, as well as obtain sign-off from a structural engineer and a private certifier. The much-criticised practice of private certification — a system rolled out nationwide since the 1990s to hand private, developer-appointed contractors an authority that was once the domain of government or council inspectors — has come under fire again in light of Opal Tower’s woes. Johnson, however, considers Opal’s cracking a one-off that no degree of oversight could have caught. “We are a first-world country and our systems are very tight, the checks and balances vigorous,” he says. “Something weird has happened with Opal.”
Striped lime-green, its sparkling façade studded with recessed alcoves, the triangular tower was designed to catch the eye. Now it is just attracting ridicule. Prior to being shut down, the developer’s website became a magnet for reader comments displaying a distinct brand of gallows humour. Jenga Tower, the faulty building was dubbed. The Leaning Tower of Homebush. “Superb development, offering a chance to grow both your capital base and the size of the property you own. Mine is 2.5mm larger than it was only this morning!” wrote one joker. There was more: “Cheap apartment, perfect for adrenaline junkies” and “If I rent or buy there should I make out a will?”
People who’d poured their life’s savings into the building didn’t find it funny. Eskander tells me one body corporate member had an apartment up for sale for $800,000 prior to Christmas Eve. “Afterwards, someone made an offer of $400,000,” he says. “Then, as the saga unfolded, they backed out altogether.” Andrew Neverly, 59, bought an apartment off the plan with his wife five years ago for $840,000. “I don’t think it’s worth anything now,” he told 60 Minutes. “We’re up shit creek.” Eskander says NSW Fair Trading told tenants they had legal grounds to break their leases as the building was “uninhabitable”. “If you’re an owner-investor you’ve lost your tenant, and when you’ve lost that rent how are you going to pay your mortgage?” he says. “Your whole life starts to unravel and it’s very hard to get another [tenant] in. Even the ones that are in there are renegotiating their leases, saying ‘I’ll pay 40 per cent, take it or leave it’.”
Some tenants may even be even profiting from the disaster. Several landlords claim tenants who have stopped paying rent are still accepting a temporary accommodation allowance paid by the builder, Icon. Weekly rent in the tower ranges from $500 to $700; Icon, which is understood to have full liability insurance for the project, has been funding the accommodation costs of displaced residents with allocations of between $220 and $500 a day, plus expenses, depending on the size of their apartment. Estimated cost so far: at least $10 million.
Those hollering for a scapegoat would have been disappointed with the government-commissioned investigative team’s report, which stopped short of pinning blame on anyone. Not Icon, a reputable company backed by multibillion-dollar Japanese firm Kajima Corporation. (Icon’s managing director Julian Doyle had addressed reporters gathered in the tower’s forecourt after the second evacuation and told them: “No, we didn’t make a mistake. No, this wasn’t a rush job.”) Not the design and construction engineers WSP, whose Australian CEO Guy Templeton had stood next to Doyle and insisted there was never any risk of the building collapsing. Not any of the subcontractors involved, nor McKenzie Group, the private certifiers who had final sign-off. And not Opal’s Australian-based developer Ecove, which has four other towers in the Olympic precinct, including the 38-storey Boomerang Tower under construction a block away. Ecove director Bassam Aflak has called the cracking “a rare case of structural defect” and continues to maintain the building is of “high quality”. (Ecove and Icon declined to comment for this story.)
Nevertheless, the debacle has led to a wave of recriminations and further dented public confidence in Australia’s construction industry. According to last year’s benchmark Shergold Weir Report, that faith was already much shaken — and with good reason. The damning report, by Western Sydney University chancellor Professor Peter Shergold and lawyer Bronwyn Weir, outlines “significant and concerning” problems with compliance and enforcement systems across Australia. “Those involved in high-rise construction have been left largely to their own devices,” the report states. A 2012 study by researchers from UNSW’s City Futures Research Centre surveyed more than 1000 NSW strata owners and found 72 per cent (85 per cent in buildings built since 2000) knew of at least one significant defect in their complex, with leaks and lack of fire safety most common.
Dramatic, alarming and impossible to ignore, the cracking in Opal Tower, along with recent disasters such as the cladding-fuelled fires in Melbourne’s Lacrosse and Neo200 apartment buildings, have highlighted a systemic problem. “Successive parliaments throughout the country have focused more on procurement of housing stock than on how it’s been constructed and the safety of people within it,” says Stephen Goddard, strata solicitor and spokesman for advocacy group Owners Corporation Network of Australia. Problems in the industry, he says, can be traced back to the deregulation of the late 1990s. “For the last 20 years you’ve had more consumer protection purchasing a fridge than a million-dollar apartment. What sort of stupid breed of people are we, that we could live like this? That it takes something like Opal for people to suddenly notice?”
The NSW Government finally addressed the Shergold Weir recommendations in February by announcing a regulatory overhaul of the state’s construction sector, starting with the appointment of a building commissioner. Under the shake-up, every party in the construction chain, from the design drafts to the final build, will be required to be registered and qualified, and builders will not be allowed to make changes during the construction process without submitting a revised plan to the building commissioner for approval. The genie can’t be put back in the bottle in terms of private certification, but the government has vowed to crack down on “dodgy certifiers”.
Laws will be clarified to remove any doubt that building practitioners owe a duty of care to homeowners. “It’s critical that good public policy be created around this issue,” Goddard says. “The NSW Government has to follow through on its commitment and the other states need to follow suit or we’ll have more and more Opals. I would advocate in the strongest possible way that people not purchase off the plan until we have that statutory duty of care that allows owners to sue if there’s a breach.” Former planning department chief Chris Johnson agrees Opal’s troubles were the wake-up call the industry needed. “We don’t need to overreact and expect all these towers to collapse,” he says. “But I think all developers will now want to be conservative rather than radical in terms of processes. No doubt a few more checks and balances will come into play and that’s not a bad thing.”
Eskander has too much on his plate close to home to worry about the state of the nation’s large-scale apartment block industry. He is 28, with close-cropped hair and a quietly confident manner, and he now knows more about hob beams than he ever cared to know. He and his wife Amy moved into the penthouse level of Opal Tower in August, hoping to start a family. That’s been put on hold, as has Eskander’s paying job. He’s had to take time off from running his Sydney pharmacy business to steer a steady course, on behalf of residents, through the varying stages of hysteria, anger, fear and uncertainty triggered by the Christmas Eve evacuation.
Almost from the moment the cracks appeared Eskander, as body corporate chairman, has been acting as a fulcrum for a dizzying array of stakeholders and professionals: owner-occupiers, investors and tenants, government departments, the builder, developer and architects, as well as the hundreds of engineers, surveyors and tradies who have been probing every corner of the building since. “People’s lives have been turned upside down overnight and there is nothing to fall back on as a safeguard,” he says, over the whoosh of traffic from a nearby motorway. “No government department is going to walk through and fix it; there’s no union that helps you. It’s up to us to fix it. It’s delicate, ensuring the best outcome for everybody.”
He and the eight other members of the strata committee have been putting in long hours, some juggling full-time jobs with strategy meetings that last into the early hours of the morning. Eskander’s back living in his apartment, but understands why others have not returned despite being given a green light. “People at night hear a bit of gyprock cracking — it’s not structural concrete cracking but because of the event they get anxiety,” he says. “Some people would say, ‘No way I’d spend a night in that building’. But some of us don’t have a choice; you can’t just get a refund. We’re taking it day by day. For me, I just want to ensure that when I leave my home and if my wife is there, she’s safe, you know?”
In the lobby and elevators of Opal Tower, as well as at the breakfast buffets of neighbouring hotels, topics of conversation overlap: beyond the thrum of disquiet about the safety of the building and anxiety about the financial fallout, talk among the displaced is of the hassle of new commutes, small children out of their routines, concern for the welfare of pets in boarding and the safety of valuables left behind. Plenty of residents are homesick. Some are just sick of the upheaval. Tenants Ilya Levchenko and his wife Anastasia Chen, both 39, are back in their two-bedroom apartment on the 24th floor, but their three-year-old twins Ivan and Alina are having trouble adjusting. “We’ve lived in three different places in a month,” says Levchenko, a software developer from Russia. “The children have become very, very nervous. In the evenings when I walk with them and I say it’s time to go home they say, ‘Father, which home?’”
Tina Tong’s toddler son had been home from hospital just two days following a bout of pneumonia when the alarms started clanging in Opal Tower in December. “The first days were chaos, everyone was in shock,” she says. “When I went on site and saw the damage, I went back to the hotel room and cried. I just thought, ‘That’s it, we’re done. There is no way we can recover from this’.”
Tong, a 35-year-old graphic designer, had purchased a four-bedroom apartment on one of the upper floors with her parents, who were planning to enjoy their retirement close to their daughter and grandchild. “I can’t provide them with a safe place to live so I’ve had to send them back home to China,” she says. “At that age, they don’t want to live in a hotel for months. We’ve all had to put our lives on hold.” Three months on, she just wants to go home. “My son is traumatised,” she says. “It’s kind of embarrassing, to be honest, to have to explain to people what is wrong with our building. To explain to the childcare teacher that if my son experiences behavioural changes or he’s naughty it’s because we are living in a hotel.”
For owners, the itch and prickle of prolonged inconvenience is coupled with the stinging realisation they’ve been financially hung out to dry. “You’ve saved up for four, five years of your life for a deposit, you’ve worked hard, and now you’ve got an apartment that’s probably the biggest asset you own,” says Eskander. “If a problem happens, what do you have to protect you? Nothing.”
As owners continue to shop around for the best legal firm to represent them in a potential class action, experts have warned they face an uphill battle. “It is a complicated case because no one yet has identified who’s at fault,” says Sydney lawyer and class action specialist Bailey Compton. “For them to run a case is going to be expensive and take a commitment of probably two to three years.”
One thing is certain: with so many players (and insurance companies) involved in this calamitous affair, the quest to find who ultimately shoulders the blame means it’s open season for lawyers.
On April 12, the owner’s corporation gave formal consent for remediation works to begin on the damaged apartments. The repairs will take at least 10 weeks, during which time 169 residences will have to remain empty. Icon will reimburse landlords for rental losses during that time, and its parent company Kajima Corporation has agreed to an extended warranty on major defects for 20 years, up from six. “From day one we have worked hard to get to where we are now,” Eskander says. “Something this big and complex, all the different stakeholders had to work together or the building would never be repaired; people wouldn’t ever be able to come back.”
Some analysts say there’s potential for property values in Opal Tower to recover over time once the problems are fixed. Goddard disagrees: “Opal is toxic. The reputation of the building is now so decimated that no one will ever buy those apartments off those people. Now what did those consumers do to deserve that? And where was the state of NSW while that was happening?”
Right now, the triaged structure looms proud but broken. A storm is rolling in and wind gusts worry the webs of blue netting that flag repair work on various levels. On the balconies of absent tenants sit the skeletons of dead plants alongside hastily abandoned plastic toys. “Many of us planned for kids this year,” Eskander says. “We thought this would be a great place to raise our families. But now, can I have a newborn in this building? It’s difficult at this stage to have an answer to that.”
Can he ever feel completely safe? Also difficult to answer. “I guess each person has to weigh that up,” he says. “If you can’t get out, do you sell it, take a loss and hope that you can get compensation later? Do you wait it out?” He suddenly looks very tired. “People shouldn’t have to go through this. You don’t buy your home and then it becomes a headache in your life, something that has all these question marks over it.”
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