QBCC lifts suspension on builder licence of top tier construction giant Laing O’Rourke

Queensland’s building regulator has reinstated the building licence of construction giant Laing O’Rourke just five days after suspending it. Here’s why.

Laing O'Rourke offices in Sydney.

QUEENSLAND’S building regulator has reinstated the building licence of construction giant Laing O’Rourke after the company found $32 million in assets needed to meet its financial obligations.

Laing O’Rourke holds the state’s highest possible class of licence, allowing it to work on projects worth more than $240 million, but it was suspended after an 11-month investigation by the Queensland Building and Construction Commission on Friday.

Laing O’Rourke Australia managing director Cathal O’Rourke said the company welcomed the decision to lift the suspension, which came with a condition that it provide monthly reports to the regulator.

“Laing O’Rourke has undertaken internal restructuring to better demonstrate our asset base to the QBCC,” he said.

“We have also demonstrated our improving business profitability, achieved through increased productivity and project performance.

“Our business maintains a strong financial position and of course we have independently audited accounts.

“We have no outstanding creditors, a strong cash position and we continue to operate profitably.”

NSW Minister for Transport and Infrastructure Andrew Constance, Sydney Trains Acting Program Director Tom Gellibrand and Laing O'Rourke Managing Director Cathal O'Rourke tour the Sydney Yard Access Bridge after a press conference at Mortuary Station in Sydney, Wednesday, March 7, 2018. Mr Constance has announced Laing O'Rourke has been awarded a $955 million contract to transform Central Station as part of the state government’s Sydney Metro project.

The QBCC confirmed last month it was investigating the financial position of the company, whose projects have included the $130 million Griffith University Health Centre, Brisbane Airport expansion, Brisbane Convention and Exhibition Centre and the $955 million redevelopment of Sydney’s Central Station.

The QBCC today said Laing O’Rourke had demonstrated “an increase of $32 million in equity held by the business”.

“The company has demonstrated to the QBCC’s full satisfaction that its Net Tangible Assets meet Queensland’s requirements,” it said in a statement.

“In addition to restoring the licence, the QBCC has imposed a condition that the company provide internal management accounts on a monthly basis until the company’s next annual audited accounts are available.”

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In January Laing O’Rourke was ordered to shell out hundreds of thousands of dollars in back pay to about 40 workers after the Fair Work Commission ruled they had been underpaid.

The UK-based company’s Australian arm booked a net loss of $26.6 million towards the group’s global net loss of £46.5 million ($84.6 million) last financial year.

In its last annual report it said it had reduced its workforce in Australia from 3262 in 2017 to 1997 people in 2018.

It said its FY18 results had been hit by reduced revenue and increased tender costs along with legal and other costs over a terminated contract to construct cryogenic tanks at the Icthys LNG site near Darwin. Its losses on that contract as at June 30 were $73.3 million.