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The Dunedin City Council cut its ties with a contractor after finding problems with the now liquidated company's work on the city's footpaths.
Contractor All About Asphalt went into liquidation last year, owing at least $212,873.51 to creditors, but the council says it did not pay the company for work that was not completed to contract standards.
This included work redone by the company in Royal Tce after problems were found with the initial work. A different company had to come back a third time to complete the work to council standards.
Council transport projects team leader Gareth Evans said in a statement the company was awarded a footpath resurfacing contract in September 2014 for $435,137.50.
"In the course of administering this contract, DCC contract managers identified a number issues where the contract standards were not being met by the contractor. Issues included:
● Supply and laying of poor-quality asphalt.
● A lack of quality control and documentation around the asphalt production.
● An inability to meet due dates for completion.
Acceptance of the product would have resulted in a "significantly reduced life expectancy and an increase in long-term maintenance costs''.
The quality issues related to asphalt supplied by All About Asphalt from its own asphalt recycling plant and not from asphalt manufactured by local suppliers.
The company successfully completed about half its contract and payments were made on that basis.
"No payments were made for work that did not meet the required quality and material specifications and this included the work [and rework] carried out on Royal Tce,'' Mr Evans said.
There were no issues with the way council staff managed the contract.
"This was an example of good and proactive contract management and oversight.
"DCC staff identified issues at an early stage and worked with the contractor to try and achieve a favourable outcome.
"Unfortunately this was unable to be achieved and the contract was terminated ...''
The council was owed no money by the contractor and no money was owed to the contractor by the council.
The company was an approved council contractor and had successfully completed similar work for the council in the past.
Efforts to contact the former owners of All About Asphalt were unsuccessful.