Grocon loses contract to key project as construction empire struggles

Struggling construction giant Grocon has lost the contract to a key project that it hoped to ring fence from the empire’s fall into administration.

Exclusive: Australian construction giant Grocon has been plunged into a new crisis, losing the contract to build a key project that it had hoped to ring fence from the empire’s fall into administration.

Daniel Grollo placed 39 Grocon companies into administration last week, but wanted to keep an office block being built for Aesop in Melbourne and the Ribbon project in Sydney’s Darling Harbour separate.

A botched project at Sydney’s Barangaroo, for which Grocon was suing Infrastructure NSW for $270 million, was blamed on the collapse.

However, there had been other problems with the company’s finances before that court case.

Grocon CEO, Daniel Grollo. Picture: Stuart McEvoy

Grocon’s bid to salvage the Aesop project was ended when investors terminated their contract, with the locks changed on the site on Thursday.

Subcontractors were notified by a letter sent out on Thursday morning, as the Impact investment group tried to get the project finished.

“Even after calling in the administrators Grocon wanted to continue with the project, while at the same time advising us that they had no money to contribute towards the cost overruns to complete the project or to pay subcontractors for works performed and for which we have already paid Grocon,” the letter emailed by Impact to subcontractors said.

“We all want to see the site reactivated and the project completed. We want to make that happen but it can’t with Grocon staying on.

“That’s why Grocon has today been terminated as builder/developer.”

The Ribbon project in Sydney. Picture: Jenny Evans

The only current Grocon development, the Northumberland in Collingwood, Melbourne. Picture: NCA NewsWire / Daniel Pockett

The letter said that “Grocon owes contractors around $8 million” while Impact investors would lose $20 million.

However, the letter said that three builders have already been lined up to finish the project, which was almost done.

The decision for Grocon companies to be put into administration raised concerns about whether it had any cash or assets to pay subcontractors and other bills.

Grocon was a family business started by Luigi Grollo 73 years ago.

It went from concreting swimming pools in the 1960s to becoming one of Australia’s most iconic builders.

Grocon built the Rialto, once Melbourne’s tallest building. Picture: Daniel Pockett

The Eureka Tower, a Grocon building that was once the tallest apartment tower in the world. Picture: Daniel Pockett

In Melbourne it built the Rialto and Eureka towers, Crown Casino, 101 Collins Street, AAMI Stadium and redeveloped the MCG.

In Sydney, it built towers at 1 Bligh Street, 161 Castlereagh and 1 Martin Place, the former GPO building now home to Macquarie bank.

In Queensland it also built the Oracle at Broadbeach, 480 Queen Street in Brisbane and 55 Elizabeth Street Brisbane, which was leased by the ATO.

In South Australia, the company redeveloped a RAAF base north of Adelaide.