Commonwealth Games Village builders Grocon facing licence suspension over financial cloud

GROCON’S Queensland building licence will be suspended today, as investigations into the finances of the Melbourne-based company continue. So how has the construction giant found itself in this position?

GROCON’S Queensland building licence will be suspended today, as investigations into the finances of the Melbourne-based company continue.

The Queensland Building and Construction Commission put conditions on the licence last month, forbidding them from taking on or seeking new work, after they booked losses on two projects that have a face value more than $1 billion.

Late last week, the QBCC decided to completely suspend the licence, effective this morning, after the company failed to satisfy the QBCC’s inquiries about their finances.

Grocon national construction manager Peter Ward with Gold Coast Deputy Mayor Donna Gates (far left) and Commonwealth Games Minister Kate Jones at the Parklands Project.

Grocon head of construction Peter Ward said at the time the company had booked “some big losses” including on the Commonwealth Games Athletes Village, to the Queensland arm, in the knowledge the parent company could comfortably keep it financial.

Yesterday Mr Ward said the company had not heard back from the regulator since they last wrote to them.

“They could have spoken to us first,” he said, but declined to comment further.

Gold Coast 2018 Commonwealth Games Corporation Chairman Peter Beattie, and Queensland Premier Annastacia Palaszczuk during the formal handover of the Parklands Development to the Gold Coast 2018 Commonwealth Games Corporation on October 2. Photo: Dave Hunt

A statement from the QBCC said the suspension would remain in place until the company demonstrated that it satisfied licensing requirements.

“The QBCC has afforded Grocon ample opportunity to show they meet the requirements to hold a building licence in Queensland,” the statement said.

“The company has not been able to demonstrate they satisfy these requirements.”

The QBCC’s ban on future work happened two weeks before Grocon handed the athlete’s village to Commonwealth Games organisers.

'Village Way', a street running through the heart of the Gold Coast 2018 Commonwealth Games Athletes Village. Photo: Dave Hunt

The company has yet to file its 2017 accounts, but accounts for the previous year, lodged a year late, show the QBCC required Grocon to match liabilities falling due in the coming 12 months with an equal value of assets that could be liquidated in the same period.

But last year, current assets were $256.7m and current liabilities were $294.7m — a shortfall of about $38m.

The accounts show revenue plunging 37.4 per cent from $457m to $286m after a fall in its number of active projects from eight to three.

The plunge in revenue drove Grocon to a loss of $16.7m.