KAWARAU FALLS: ANOTHER ONE BITES THE DUST

The crisis of global capitalism has hit New Zealand's largest construction project with an almighty bang.

The $1 billion Kawarau Falls Station development at Frankton, near Queenstown, has been put into a receivership and the 600 or so workers employed by the project will soon to be out of work. The corporate media calls this 'workers facing an uncertain future'.

And, of course, an almighty eye sore of aging concrete and metal will blight the landscape for years to come.

The project was largely funded by the Bank of Scotland which has a first mortgage on the failed project of some $513 million.

The Bank of Scotland was taken over by Lloyds Banking Group in 2008.

But it has been rocked by the global economic meltdown and the Bank of Scotland's loss in 2008 was almost 11 million pounds (approximately $29 billion).

The British Government, in an effort to shore up Lloyds, bought a 43 percent in it.

Earlier this year the British government agreed to insure £260 billion of the banks toxic loans as well as possibly raising their stake in the bank to 65%.

The chairman of the bank has resigned.

But now the crisis has hit these shores with the Bank of Scotland pulling the plug on Kawarau Falls.

Hanover Finance, the same outfit that gave the hapless Dave Henderson some $70 million for his failed village project near Queenstown, also poured some $150 million into Kawarau Falls.

Investors in Hanover won't see any of that money again.

Hanover co owner Eric Watson recently celebrated his 50th birthday with a lavish party in Istanbul. The party was held over two nights.

It followed the equally lavish birthday bash of his Hanover co-owner Mark Hotchin, who held an exclusive party on Fiji’s up-market Vomo Island.

Hanover investors may well now be seriously rueing allowing Watson and Hotchin to attempt to trade Hanover out of the financial black hole it has fallen into.

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