Brisbane builder CKP Constructions collapses, owing $3 million

A MEETING has heard the reason Brisbane-based builder CKP Constructions collapsed, leaving four projects around the city uncompleted.

Uncompleted construction at Ison Street, Morningside.

A MEETING has heard the reason Newstead-based builder CKP Constructions collapsed, leaving four projects around the city uncompleted.

The company, founded in 2003, had built unit and commercial developments before administrators Worrells Solvency and Forensic Accountants were appointed earlier this month.

CKP Construction director Craig Petersen told a meeting of creditors that an unpaid debt owed by a developer called Gabba Holdings had lead to cash flow problems from which the company was unable to recover.

Mr Petersen said pursuing Gabba had proved too much and the company couldn’t overcome the $1 million left by debt and various costs.

The company’s collapse is the latest in a series of building company failures and comes as the Reserve Bank of Australia singled out the Brisbane property market as an area of concern.

Worrells partner Lee Crosthwaite told creditors that CKP had four apartment and residential projects in various stages of being built in Morningside, Ascot and Alderley but work had now stopped at the sites.

CKP Constructions has collapsed owing creditors about $3 million. Picture: Jono Searle.

Mr Crosthwaite said it was unlikely there would be sufficient assets to pay CKP’s debts if the company was liquidated.

Trade creditors, including carpenters, earthmoving contractors and plumbers, are owed about $2.5 million while Westpac Bank is owed $714,000.

Worrells’ Mr Crosthwaite said there had been an increase insolvencies involving builders, with subcontractors also feeling the pain.

Housing and Public Works Minister Mick De Brenni said the CKP collapse meant subcontractors had once again been left exposed.

“Subcontractors should not be shouldering high levels of financial risks on building projects,” Mr De Brenni said, adding he was resolved to push the project bank account reforms through Parliament.

Brisbane/Gold Coast-based Cullen Group collapsed just before Christmas, owing subbies an estimated $18 million and leaving a string of uncompleted projects.

The State Government is proposing introducing project bank accounts that will quarantine money for subcontractors in the event a building company collapses or it simply decides it does not want to pay up.

Master Electricians Australia said the collapse of CKP underscored why the State Government must urgently press ahead with the reforms.

MEA Chief Executive Malcolm Richards said that the collapse would leave many sub-contractors out of pocket. “This is devastating news for the many mum and dad sub-contracting businesses who will now be left out of pocket due to the collapse of CPK Constructions,” Mr Richards said.

“If project bank accounts were already in place, all the subbies who have been impacted by this collapse would not be left out in the cold.”