Giant building firms face losing Queensland licences
Two multinational construction companies have been caught up in a Queensland building watchdog crackdown with the firms forced to raise millions of dollars to ensure they keep their licences.
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Two multinational construction companies have been caught up in a Queensland building watchdog crackdown with the firms forced to raise millions of dollars to ensure they keep their licences.
The two companies, which cannot be named by the Queensland Building and Construction Commission (QBCC) at this stage because they are under a show cause notice, had to raise a total of $57m by way of share issuances. The QBCC is cracking down on the finances of building companies after a string of collapses that have cost smaller subcontractors billions of dollars.
The companies are the latest multinationals to be ensnared in the state’s annual financial disclosure laws that aim to ensure building companies operating in Queensland have the funding to support projects.
The licence of engineering giant Laing O’Rourke’s Australian arm was suspended in March 2019 after the QBCC said it was concerned about its financial viability. The licence was later reinstated after Laing O’Rourke injected $32 million into its local operation.
Construction giant Lend Lease Engineering, which had been working on the $650 million Kingsford Smith Drive upgrade, also had its building licence briefly suspended.
The laws, introduced by the State Government in January 2019, are part of a suite of reforms that work to improve security of payment in the industry. Almost $1.4bn of working capital has been injected into Queensland building and construction companies since then.
QBCC Commissioner Brett Bassett said that ensuring companies were financially viable meant a sustainable industry. “When a homeowner enters a contract with a builder for a renovation or new build, they expect that the builder is financially viable to finish the project,” Mr Bassett said. “When a subcontractor issues an invoice after months of hard yakka, they expect the builder to be able to pay the amount.
Mr Bassett said there had been too many incidents of insolvency in the building and construction industry, and the annual reporting laws give the QBCC insight to help prevent further collapses. “If licensees want to operate in this industry, they must be able to remain financially sustainable and financially healthy,” he said.
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