South Australian construction and civil engineering firm York Civil enters voluntary administration
A SOUTH Australian construction giant working on two major taxpayer-funded projects has gone into administration, as ASIC documents reveal how quickly its financial position deteriorated.
A SOUTH Australian construction giant working on two major taxpayer-funded projects has gone into administration, as ASIC documents reveal how quickly its financial position deteriorated.
York Civil entered voluntary administration on Monday morning. More than 100 of its 400 workers are South Australian.
The State Government is confident there will be no significant impact to two major government-funded infrastructure projects involving York Civil — the $80 million North Tce tram extension and $801 million Torrens to Torrens upgrade of South Rd.
Transport and Infrastructure Minister Stephan Knoll said his main priorities were looking after York Civil’s workers, and making sure the two government-funded projects they are working on are completed within the current timeframes.
“There are families out there that need to feed themselves and our thoughts are with them,” Mr Knoll said.
“The other priority that we have in relation to this difficult matter is to get the projects that York Civil are undertaking for the State Government delivered — we are here to make sure taxpayers are protected.”
The Regency Park-based firm, which also has branches in Western Australia, Queensland and New South Wales, posted a $1.7 million loss in the 2016-17 financial year compared to a $344,502 profit 12 months prior, a financial report filed with ASIC reveals.
The report also highlighted more than $3.2 million in “impaired receivables” — unpaid debts owed to York Civil.
The company’s cash position also appears to have collapsed — in 2015-16 it had more than $5 million in cash reserves but this plummeted to just $512,000 the following year.
In the most recent financial report the company lodged in January, director Ian Tarbotton noted concerns with the operation of joint ventures and trading conditions within the industry in general.
“Not all joint ventures have resulted in satisfactory outcomes for the company, consequently future participation in joint venture arrangements will be assessed differently moving forward,” he said.
“Market conditions continue to materially suppress margins within the industry.”
It is not known what impact today’s announcement will have on jobs.
York Civil was working with Downer EDI on the tram extension and Leighton Holdings on the South Rd upgrade.
Mr Knoll said Downer EDI and Leighton Holdings would take up the responsibility and liability regarding the two projects.
“I’m extremely confident that the other partners are large construction companies themselves so there is no suggestion about problems with those other partners,” he said.
“It is early days and we are talking to all parties involved. The city tram extension is nearly finished and the Torrens to Torrens project is also extremely far along.”
Sub-contractors on the North Tce tram project have been recently complaining that they have not been paid for a month.
Ferrier Hodgson partner Martin Lewis, whose company has been appointed as administrator, said at this stage York Civil would continue to work on the contracts “subject to the administrators’ review”.
“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,” he said.
“Discussions are taking place with key stakeholders, including the company’s clients, ahead of a creditors’ meeting on August 16, 2018.”
Mr Knoll said his government had been left with a “pretty empty cupboard” when taking power but said work was underway to get more infrastructure projects for South Australia.
Labor Transport and Infrastructure spokesman Tom Koutsantonis said civil construction in the state was facing a “valley of death” scenario.
“Its first victim is a great South Australian business with nearly 30 years’ experience,” he said.
York Civil also has been awarded contracts for projects on the Main South Rd upgrade at Aldinga, and is almost in the second year of a four-year partnership with SA Water to manage numerous regional wastewater plants, in a contract costing $50 million to $70 million.