The federal government is facing fresh calls to better support the construction industry after the collapse of another high-profile operation which owed creditors tens of millions of dollars.
Quasar Constructions has entered administration, impacting 10 projects across Sydney and the Illawarra including work on the new Western Sydney International Airport.
The company reportedly owes creditors around $60 million and has around $6 million in assets.
Three projects have been abandoned, three are under review for rectification works, and four projects are tied up in legal disputes.
Impact at new airport
The collapse has affected work on several buildings at the Western Sydney International airport, including the maintenance centre, airport operations control centre, waste facility building and the main access gatehouse.
The National Electrical and Communications Association (NECA) which represents subcontractors, says many of its members working at the airport are affected.
NECA’s head of government relations and policy, Kent Johns, has called it a devastating blow.
“You could be losing hundreds of thousands, even millions, of dollars out of your business – this is enough to break people both mentally and financially,” he said.
A spokesperson for Western Sydney International said the four buildings Quasar was hired for are more than 90 per cent complete.
They said Aerowest, the primary contractor, is continuing to work with subcontractors to finish the project.
Urgent underwriting call
Mr Johns said NECA has written to the Prime Minister and Minister for Workplace Relations urging them to underwrite subcontractor losses.
“In their election campaign they promised to implement things called the Murray Review recommendations, which was to harden up the security of payment legislation to ensure subcontractors get paid,” he said.
“Two years down the track and we’re one year out from election that still hasn’t been delivered on –to be honest the frustration is palpable.”
In response to the request, the federal government released a statement:
It’s not good enough for subcontractors to be paid late for their work, or in worst-case scenarios, not at all.
It’s the Government’s expectation that companies do the right thing and pay small and medium businesses for the services they provide — on time and in full.
While delivery of the Murray Review recommendations primarily sits with the states and territories, we are working with them and the construction sector on more security for affected small and medium businesses.
The Revelop Group has also been impacted by the situation, with work stopped at its Calderwood shopping village site in Shellharbour.
Up until September, workers on the $50-million project had been busy, with sub-contractors pouring concrete and starting framework on one of the buildings.
Managing director Anthony El-Hazouri said it is a difficult situation.
“We’re still taking stock of it; we’re not sure if we are owed anything at this point in time,” he said.
“It’s always been a very busy site, it has progressed on schedule, on budget, very professionally, we had no real reason to suspect anything untoward.”
Mr El-Hazouri said he is confident of restarting work soon, with several new builders expressing interest in the project.
“We are hoping … in a matter of a couple of weeks we can recommence on site and keep the project going toward its projected completion date,” he said.
He said the Revelop Group is also focused on ensuring its subcontractors and site workers are protected.
Executive director of the Master Builders Association of NSW, Brian Seidler, said Quasar was a long-standing builder and had a history of mid-size and large projects.
He said its collapse underscored the broader issues the sector is facing.
“The industry in general is still talking about and the problems of lump-sum contracts; that is, contracts with a client will not allow any variation or increasing labour or materials,” he said.
He said contractors often have to estimate costs far in advance, which poses challenges for larger projects.
Comment has been sought from Quasar.
link
More Stories
2025 Engineering and Construction Industry Outlook
How the construction industry feels about Trump’s win
Construction Industry Reacts to US Presidential Election