A nearly 30-year-old Australian construction company has entered voluntary administration, placing millions of dollars of government infrastructure contracts in doubt.
The company, York Civil, is based in Adelaide and has been operating since 1990. At its peak, the company was reported to have 400 employees, with operations across New South Wales, Queensland, and Western Australia.
InDaily reports the company has appointed administrators Ferrier Hodgson to oversee the process of finding a buyer for the business and its assets, with administrator Martin Lewis saying work on its current infrastructure projects would continue despite the appointment. The administrators also revealed the company has 186 employees, who are set to be affected by the administration.
The company is currently working on numerous significant infrastructure projects for the South Australian government, including an $896 million upgrade to major thoroughfare Torrens Road, and the North Terrace tram extension. Both projects have been ongoing since 2015.
“York Civil is an iconic business that undertakes engineering and construction projects for both government and private clients across defence, power, transport, resources, water and marine sectors,” Lewis told InDaily.
“Discussions are taking place with key stakeholders, including the company’s clients ahead of a creditors’ meeting on August 16. At this stage, the company will continue work on the contracts which are subject to the administrators’ review.”
A number of projects associated with York Civil have reportedly been in trouble in recent times according to the ABC, with the North Terrace tram extension recently coming to a halt due to a signalling issue that required German experts to be flown in to fix it.
However, South Australian transport minister Stephan Knoll told the ABC the delays were usual for projects of such size, and the government is working with the administrators to ensure business as usual.
“The advice that I have in relation to the two major projects, the city tram extension project and the Torrens to Torrens project is because they’re both under a joint venture arrangement, that the other partners to that joint venture take up the responsibility and the liability in relation to the delivery of those projects,” Knoll told the ABC.
“We’re working with the administrators and also with those two special purpose vehicles to make sure that those responsibilities are taken up.”
York Civil is also likely to have a number of subcontractors and suppliers who could be left out-of-pocket if the administrators are unable to find a buyer. The first meeting of creditors will be held on August 16.
Business leaders and politicians have previously called for greater protections for subcontractors, suppliers, and home buyers when construction companies collapse, with former Senator Nick Xenophon saying those affected parties were “left in the lurch” after collapses.
“In recent years there have been a number of high profile insolvencies in the building and construction industry,” Xenophon said in a memo to Prime Minister Malcolm Turnbull in 2016.
“The impact of these events has a cascading effect on all participants in the building and construction supply chain, including clients, suppliers, contractors and employees.”
SmartCompany has contacted Ferrier Hodgson for further information.
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Dominic Powell is a journalist at SmartCompany and a tech and music geek. When he’s not writing, you can find him reading or browsing record shops.
