ACT building company collapses owing more than $20m

Administrators have been appointed to a 50-year-old Canberra-based construction firm with creditors owed in excess of $20m on multiple projects.

Administrators have been appointed to Canberra-based construction firm Project Coordination (Australia) with creditors owed in excess of $20m.

Company directors – father and son Paul and Gavin Murphy – named RSM Australia partners Jonathon Colbran, Frank Lo Pilato and Brett Lord as administrators, who will examine the books of the firm and look at options for its future.

The award-winning company, which is in its 50th year of operation, specialised in the construction and management of small and large-scale public and private buildings and infrastructure in key sectors.

The directors advised staff of their decision at two separate meetings at the company’s Canberra and Wollongong offices. They also released a statement explaining their “soul-destroying decision”.

Mr Colbran said the majority of the company’s 67 staff – 38 of whom are based in the ACT and 29 in NSW – had been made redundant and would receive the majority of their employee entitlements immediately. The balance of any entitlements will rank as a priority debt of the company. “A small team of about 12 staff will be retained to help the administrators with their work,” Mr Colbran said.

“The directors have also committed to working alongside us to collect monies owed to the company and to help get projects moving again as quickly as possible.”

Headwinds in construction sector.

He said the company was working on 14 building projects – 10 in the ACT and four in NSW which are at various stages of construction, from design and early works to some nearing completion. All work on these sites ceased immediately prior to the appointment of the Administrators.

RSM Australia Partners said it had taken steps to secure project sites and will this week contact principals, customers and other creditors to advise them of their appointment and next steps. Mr Colbran said the directors had advised RSM that despite having a healthy pipeline of future work – in the order of $90 million – they did not have enough funds to continue operating.“Despite injecting a significant amount of their own personal money into the company the directors advised me that losses incurred from fixed price contracts combined with escalating subcontractor, supplier and operating costs had negatively impacted the company financially,’’ he said. Mr Colbran said RSM’s initial review of the company’s books and records, that are still being reconciled, had identified more than 200 creditors. These creditors are owed more than $20 million, with the majority of these debts being less than two months old. “These numbers are preliminary and are likely to change over the coming weeks as we undertake detailed investigations into the company’s financial affairs,’’ he said. Project Coordination is the latest in a series of high-profile company insolvencies RSM Australia Partners, including Mr Colbran, have been appointed to across the country, including the PBS Group and Langford Jones Homes.RSM will write to creditors this week advising them the first meeting of creditors will be held on April 2 virtually and in-person in Canberra.