Probuild a ‘lemon’ that subbies fear will hit them hard

Failed construction giant Probuild is a ‘lemon’ that no one will want to buy given it undercut prices on so many projects, a subbies group has claimed.

Australian building company Probuild has plunged into administration with over $5 billion in building projects around Australia now under a cloud. A Probuild site in Elizabeth St. Melbourne is pictured.Picture: Ian Currie.

Failed construction giant Probuild is a ‘lemon’ that no one will want to buy given it undercut prices on so many projects, it’s been claimed.

Subbies United spokesman John Goddard says there is growing scepticism about whether Probuild administrator Deloitte would be able to find a purchaser for the company that collapsed last week.

“They were undercutting on projects so anyone taking on the company would have to deal with that,” Goddard says. “I can’t see anyone wanting to do it.”

Goddard says he knows of subbies owed up to a quarter of a million dollars on Probuild projects. Deloitte placed ads in the national press over the weekend offering the company for sale and describing it as a “unique opportunity to secure a leading civil construction firm.”

Contractors walk off a Probuild site last week.

Ahead of the appointment of administrators, subbies last week walked off Probuild projects around the country, including at 443 Queen St in Brisbane and the Elizabeth North Stage 2 development in Melbourne.

Queensland Building and Construction Commission (QBCC) records show that Probuild’s Queensland arm, PCA (Qld), was issued with an infringement notice in 2020 for not ensuring proper supervision on projects.

The building watchdog requires construction managers to ensure that any work carried out by licensed contracts is supervised by a qualified person.

Deloitte voluntary administrator Sal Algeri says he is quietly confident work will recommence on at least one of Probuild’s sites this week. The expressions of interest campaign to sell Probuild has been formally launched and will close on March 2.

”We had received plenty of interest ahead of formally launching the sale process, and are now in contact with more than 20 parties,” he said.

Leading credit reporting agency CreditorWatch chief executive Patrick Coghlan says the collapse of Probuild was a “devastating hit” to the Australian construction industry which could have been avoided.

“Sadly, I fear this is the tip of the iceberg, and we could see many more going under, as an industry that was already under significant pressure is dealt another heavy blow,” he says. CreditorWatch said there were plenty of red flags about the company leading up the collapse.

Probuild administrator Sal Algeri

The credit reporting agency listed Probuild under a D1 or D2 RiskScore Rating from October 2021, with its risk of default or insolvency significantly higher than the average Australian business.

In the past five years, Probuild had 1588 credit enquiries, of which 545 were lodged in the last 12 months alone. Probuild’s average repayment time also increased substantially in 2021, rising from just under 28 days in March 2021 to 58 days in February 2022.

The collapse of Probuild followed Melbourne-based ABD Group and Brisbane-based Privium.

WATER WORRIES

The devastating flooding across south-east Queensland and northern NSW has highlighted the need to cope better with storm water polluting our waterways.

As well as the tragic loss of life and property damage, the rain has resulted in oceans of untreated stormwater running into creeks, rivers and dams along with contaminants and other pollutants.

One company dealing with the problem is STAR Water, which has been involved in treating run off water from the Sunshine Coast airport expansion project and is currently working on a Brisbane housing project.

STAR Water has developed a technology using regular household recycled materials to produce filter systems that remove toxic pollutants, including microplastics and heavy metals, from stormwater.

STAR Water chief executive Chris Rochfort (illustrated) says the technology can take the pressure off water and drainage infrastructure while providing supplemental clean water for the community.

He says the effects of climate change are being thoroughly witnessed at the moment, with localised flooding experienced by many communities across the east coast of Australia. The company recently launched a $1 million initial public offering to boost its global expansion.

Originally published as Probuild a ‘lemon’ that subbies fear will hit them hard