The Australian Capital Territory’s bold push to annexe part of New South Wales through the addition of a new urban development precinct dubbed Ginninderry is becoming more complex after a key local construction firm went to the wall.
Subcontractors, creditors and clients were on Wednesday scrambling to find out where they stand after PBS Building collapsed and went into voluntary administration, owing at least $25 million and leaving a swag of builds in the ACT in limbo.
It is understood 45 dwellings are now under the control of administrators, but that the overall master planned community, consisting of four suburbs (two of which are yet to be named) will still proceed as will the movement of the ACT border.
Announced with great fanfare in September, the Ginninderry project is a key part of a major push by the Barr government to keep increasing the ACT’s population and rates base as the territory continues to go through the growing pains of scaling services and its economy to be something between a city and a state.
The development is a joint venture with the ACT government.
“The Ginninderry Joint Venture engaged PBS Building in 2021 to construct 45 flexi-living homes in Stage 2 of Strathnairn. Since learning of the news surrounding PBS, Ginninderry has been in contact with each purchaser,” a spokesman for the developer said in a statement.
“Ginninderry will work with the administrator appointed to determine the impacts and how best to complete the homes currently under construction. The purchasers will be kept informed by Ginninderry as more information comes to hand.”
Corporate undertaker RSM has been called in to see what can be salvaged from the firm, with the administrator saying all employees were made redundant on Monday and entitlements paid out in full.
“RSM’s initial investigations of the financial statements and records of the PBS construction companies have identified more than 1,000 secured and unsecured creditors. These creditors are owed a total of more than $25 million,’’ RSM partner Jonathon Colbran said in a statement.
”These are preliminary figures and may change following more detailed investigations over the coming weeks.’’
The collapse comes as the 10th consecutive interest rate hike hit mortgage holders on Tuesday in an effort to take inflationary heat out of the Australian economy.
The failure of PBS construction is a body blow to the ACT economy, with the builder a major player in Canberra’s persistently hot residential development market, which has seen the city dotted with a flurry of big new builds in an effort to create population density around town centres.
Sites run by PBS have been shut down, with administrators saying it was unclear whether work would recommence — hardly reassuring for people waiting on homes to move into.
“Over the past three decades, PBS has evolved from a family-owned Canberra-based building firm into a major construction company that has delivered more than 7,500 residential dwellings and construction projects to the value of $3.6 billion since inception,” RSM said.
PBS was structured into five companies operating across the ACT, Queensland and NSW.
“Between them, the five companies have 80 residential and commercial projects in various stages of construction, from the early design phase through to various stages of construction,’’ Colbran said.
The corporate undertaker said PBS was “another casualty of the crisis gripping Australia’s construction industry created by the perfect storm of fixed price contracts, record material costs, supply chain challenges, labour shortages and extreme weather events”.
“If works do not recommence, the operations of the PBS construction companies will progressively be shut down and sites will be handed over to customers,” Colbran said.
RSM said creditors affected by the administration of the PBS construction companies should contact RSM via email at pbs_creditors@rsm.com.au or at (02) 6217 0228.
This article was first published on The Mandarin.
Julian Bajkowski is managing editor at The Mandarin.
