An apartment block being built by Greenland Group in Sydney has hit a speedbump after the the New South Wales Environment Protection Authority ordered the Shanghai-based developer to clean up the contaminated development site before pursuing the 244-unit project further.
Construction of Leichhardt Green at the former Kolotex factory site in suburban Leichardt had already been delayed since 2014 over a series of planning disasters. Now the environmental watchdog is after the developer for failing to follow a voluntary clean up plan. For Greenland, this means investing more time and money to clean up pollutants at the project it purchased in March 2014 for A$45 million (US$34 million).
Greenland Knocked for Failing to Follow Voluntary Plan
In 2014, the local council rejected Greenland’s initial apartment development proposal for the project largely on the basis of suspected high levels of contamination at the site. The EPA has since stated that it believes that “the land is contaminated with a range of contaminants including chlorinated solvents.”
After the chemical hazards were discovered at the site, Greenland had proposed a voluntary cleanup plan to the authorities to ensure the safety of the future residential development. Greenland began selling homes in the 22,000 square metre project in 2014.
“The EPA approved the plan on the basis that Greenland would carry it out, however, Greenland have failed to carry out the terms of the proposal,” EPA Manager for Contaminated Sites Niall Johnston told the Australian Financial Review in explaining why the government was forcing the group to purify the site before proceeding further.
A Greenland Australia spokesman said no workers or members of public were exposed to the “low concentration of hydrocarbons” and that Greenland remained on track with construction despite the EPA order.
Dirty Site the Latest Obstacle for Chinese Projects in Australia
Cleaning up the hazardous Sydney site is one of many surfacing teething problems experienced by Chinese developers starting out in overseas destinations such as Australia for the first time, as the newcomers struggle to understand local markets.
Greenland is already facing delays for its Greenland Sydney Centre after recently terminating its contract with one of Australia’s biggest builders Brookfield Multiplex, to build Sydney’s tallest residential tower on the downtown site.
While it was not clear who ended the construction contract, sources said Greenland has been known to be “difficult to work with”.
Dalian Wanda and partner Ridong Group also seem to have “mispriced” the apartment market on the Gold Coast after their Jewel luxury apartment project sold only 25 percent of its units over the first year of sales.
Local sources blamed high pricing by the ambitious newcomers – between A$1 million to A$5 million for an apartment – for the slow pace of sales.
In March this year Greenland abandoned a 31-storey Melbourne project it had won in 2013 after local residents protested the Chinese group’s plans to introduce a high-rise development in the upmarket suburb.