Heartbreak for Allroads chiefs as road company collapses leaving $200m in major projects

Dozens of multimillion-dollar projects are unfinished, as the tale of woe following the collapse of one of the state’s largest road construction firms unravels.

One of the largest projects on its books, which is still incomplete, is the $92 million Brisbane Metro Depot works for Brisbane City Council under Ausco. Picture, John Gass

Tales of cashflow squeezes, late payments from private contractors and family heartbreak dominate the demise of one of the state’s largest road construction firms, which collapsed this month leaving more than a dozen multimillion-dollar projects hanging in the balance.

Allroads Pty Ltd went into voluntary administration on March 4 after Enviropipes, a pipe supply company, commenced a winding up application in the Supreme Court in Queensland this month.

The company had more than 12 multimillion-dollar projects on its books across the country when Cor Cordis administrator Darryl Kirk took control.

Before going into administration, Allroads started experiencing financial difficulty in August when affiliated company Allroads Solutions went into administration.

Some of the company’s big projects that have been left up in the air include a top-secret $50 million defence force project at the Australian Defence Force base at Shoalwater Bay, which is nearly finished.

The project is to build roads and drains for the Australia Singapore Military Training Initiative under contractor Laing O’Rourke.

One of Allroads’ projects in Ipswich is to upgrade Redbank Plains Rd. Picture: Allroads

Allroads was also part of a massive $35 million project to build critical infrastructure at Townsville’s Lavarack Barracks and RAAF Base.

The company had major contracts with Logan, Ipswich, Gold Coast, Brisbane and Moreton Bay councils.

It was near completion of a crucial $11.7 million upgrade to widen Redbank Plains Rd, one of the state’s most crucial arterials, for Ipswich City Council.

This month, Ipswich council took control of the project claiming there had been “a failure to deliver against the project’s contractual provisions”.

The project is now due for completion by year’s end.

Allroads was also overseeing the $13.2 million upgrade to the New England Highway to improve safety on an arterial road near Toowoomba.

Construction started in July and was scheduled to be completed this month.

One of the largest projects on its books, which is still incomplete, is the $92 million Brisbane Metro Depot works for Brisbane City Council under Ausco.

The facility will house the council’s initial fleet of 60 fully electric Metro vehicles but it is unknown how the Allroads demise will affect the completion date.

The company has completed drainage and road works in Moreton Bay Council but was still completing projects at Narangba.

Allroads also had two Logan City Council master drainage projects in the pipeline at the time it went into voluntary administration.

Dozens of roads across Logan have been closed or sectioned off after works came to a halt when Allroads went into administration this month. Picture: Contributed

Residents in the Logan suburb of Eagleby have lived for more than 18 months with massive concrete drain pipes abandoned on footpaths, uncovered culverts, and potholes left from uncompleted drain works.

Delays to projects in Logan exposed the company’s financial woes.

Commercial developer ESR Investment sued Allroads after the termination of a contract for civil earthworks for a development at Berrinba in Logan.

ESR took the matter to the Supreme Court in August after a subcontractor complained that Allroads had not paid $307,976.

The demise of the company was heartbreaking for brothers Jon and Dan Fulton, who founded Allroads in 2009 after starting out in civil construction as Bayside Civil, then expanding into QLD Civil.

They were later joined by partner Steve Jenkins, a family man who grew up in Brisbane, and together they established their headquarters in a massive industrial site at Larapinta.

Jon Fulton was director for 18 years with Mr Jenkins working as operations director for eight years.

Allroads founder Dan Fulton. Picture: Allroads

Mr Fulton was contacted for comment.

But Supreme Court documents from August revealed the heavy toll on his company from fixed pre-Covid contracts, supply chain disruptions, wet weather, tight cashflow margins and other “unprecedented” challenges, including counterintuitive federal government stimulus packages.

The company told the court that financial woes were exacerbated by lockdowns, travel restrictions, and workforce disruptions which led to delays and increased costs.

“The need for stringent health and safety protocols, as well as the uncertainty surrounding the pandemic, had also resulted in reduced productivity and increased expenses,” the court heard.

“The Australian government’s stimulus projects, while aimed at boosting economic recovery, have led to a surge in demand for construction materials and services.

“This heightened demand has subsequently driven up prices for essential materials such as steel, concrete, and asphalt, contributing to the escalating costs of the project at Berrinba.”

Allroads owned much of its heavy machinery and a massive industrial yard at Larapinta. Picture: Allroads

The company also faced supply chain disruptions, particularly in the availability and cost of raw materials and critical components due to the ongoing conflict in Ukraine.

The shortage of resources and the uncertainty surrounding their procurement “further strained Allroads’ ability to manage costs effectively, the Supreme Court was told.

Extreme wet weather in 2022 also exacerbated project timelines, adding “unforeseen costs”, and the depletion of company contingency funds.

The court also heard that the cost to complete ongoing projects far outweighed the company’s projected revenue.

One source, who could not be named for legal reasons, said Allroads was a family business which put its staff first.

“There was a good culture in the company but the writing was on the wall last year even though the company had the best of intentions and staffing,” he said.

“It was definitely getting harder for the company in terms of management of cash flow by August last year because some projects were not running well financially and bigger ones were not going to plan.

“Price increases after Covid hit the company hard especially on projects where the contracts were signed before Covid.”

Originally published as Heartbreak for Allroads chiefs as road company collapses leaving $200m in major projects