Lendlease says cashflow issues not to blame for delay in sewerage plant for school, housing estate

Global construction giant Lendlease says a year-long delay in building a sewerage treatment plant to service its partly built 4000-lot housing estate and school is not due to a cashflow problem, despite a $99 million after-tax loss last financial year.

Global construction giant Lendlease has denied delays in building a sewerage plant were because of liquidity and cash flow problems, blaming the hold up on final council approvals.

The company, which posted a statutory loss-after-tax of $99 million on June 30, said it was expecting imminent Redland City Council approvals for the sewerage plant.

Lendlease was scheduled to start building the sewerage plant on the Logan River in September 2021 to service its 4000-lot Shoreline estate and an associated school at Redland Bay but works are yet to start

A Lendlease spokesperson said the state government had set up a building acceleration fund to deliver the facility, which would ultimately be paid for by Lendlease.

“The wastewater treatment plant design and concept has not changed,” the spokesperson said.

“Construction is expected to commence shortly, following final council approval.”

Plastic sewage holding tanks take the effluent from Lendlease’s Shoreline housing estate

The sewerage plant delay followed the company acquiring the $5.5 million 74-hectare riverside site in June and then being forced to refinance the sewerage project after a cost blowout.

Initial plans were for a $30 million state-of-the-art treatment plant to cleanse the treated water through wetlands before dumping into the Logan River.

However, costs soared to more than $100 million after it was revealed the Longland Rd plant would be a membrane bioreactor.

The sewerage plant cost blowout coincided with Lendlease shouldering a $1.62 billion debt at the end of June and posting a 278 per cent drop in net operating cash flow for 2022.

The company’s $99 million after-tax loss followed a $264 million net loss after tax for the period ending December 31, 2021 and a $310 million net loss in the 2020 financial year.

However, this financial year, to December 31, Lendlease reported a core operating profit after tax of $105 million, which the company said compared favourably to $28 million from the same time last year.

The site of Redland Bay’s second state primary school to service the Shoreline housing estate which is not connected to a town sewerage system.

Construction of the school, by ADCO, is also under way and due to open in 10 months, when it will be connected to its own septic tank sewer system.

A cap on the number of houses that can be built at the Shoreline estate before a sewerage plant connection was lifted from 200 houses to 500 after Redland City Council approved an additional two above-ground septic tanks late last year.

The additional tanks will be installed across the road from the new primary school, being built on land which cost the state government an estimated $8 million

A Lendlease senior development manager for Communities also revealed this week that it would be draining a man-made dam to make way for new roads, houses and a wildlife corridor.

The manager sent emails answering questions to a local wildlife group.

“While in our future development area, Lendlease has not yet taken occupation of this land and it is still used for farming/grazing purposes,” the Lendlease manager’s emails, dated March 8, 2023, told the wildlife group.

“Lendlease currently has no immediate plans to construct in proximity to the dam area.

“It is, however, within a future development area, which will ultimately be developed.

“Prior to dewatering of the dam, a pre dewatering survey and management plan will be developed.”