Building giant collapses: 80 projects abandoned, $25m owing

National building company PBS has collapsed owing $25m and leaving scores of unfinished projects scattered around the country amid a deepening industry crisis.

• ‘Gut-wrenching’: PBS directors respond

National building company PBS has collapsed owing $25m and leaving 80 unfinished projects scattered around the country amid a deepening industry crisis.

RSM Australia were on Tuesday appointed voluntary administrators of PBS and its trading companies operating in the Australian Capital Territory, New South Wales and Queensland.

The 33-year-old company earlier this week abandoned construction sites amid mounting losses, rising costs and labour shortages.

RSM Australia partner Jonathon Colbran said the company had 80 residential and commercial projects in various stages of construction.

“All work on these sites ceased immediately prior to the appointment of the administrators and it is not clear at this stage whether works will recommence,” said Mr Colbran.

“If works do not recommence, the operations of the PBS construction companies will progressively be shut down and sites will be handed over to customers. 

Over the past three decades, PBS had evolved from a family-owned Canberra-based building firm into a major construction company. The company had delivered more than 7,500 residential dwellings and construction projects to the value of $3.6 billion since inception.

Mr Colbran said PBS had become another casualty of the crisis gripping Australia’s construction industry created by the perfect storm of fixed price contracts, record material costs, labour shortages and extreme weather events.

Locked up PBS site on the Gold Coast

“RSM’s initial investigations of the financial statements and records of the PBS construction companies have identified more than 1,000 secured and unsecured creditors. These creditors are owed a total of more than $25 million,’’ he said. ‘These are preliminary figures and may change following more detailed investigations over the coming weeks.’’

Mr Colbran said PBS employed more than 180 staff across three states and territories. “All employees were made redundant on Monday 6 March, prior to the appointment of the administrators, and all outstanding employee entitlements have been paid in full,’’ he said.

A statement released by the directors described the action as a “incredibly difficult decision”. “This has been a gut-wrenching decision that we know will impact many lives and livelihoods,” the statement said.

“However, after months of intense efforts behind the scenes, in the end it was the only responsible course of action available.

“In relation to our current projects, we secured, not abandoned, these sites with the express purpose of not incurring any further expenses.

The incomplete Shoreline building, 61 Old Burleigh Rd, Broadbeach on March 5, 2023. Picture: Richard Gosling

“We took this step to ensure that we could negotiate better outcomes with clients for the ultimate benefit of creditors.” The statement said PBS had prided itself on getting the job done “no matter what the challenge”.

CFMEU boss Zach Smith says workers on the two abandoned Gold Coast projects would likely be left without pay.

“The situation we have today is we have contractors that have worked on PBS projects and are unlikely to get paid for the work,” he said.

“That’s unpaid wages and entitlement profits, payments to suppliers.

“There will be a massive downstream effect from this announcement today.”

Mr Smith lashed out at the “intolerable” conditions currently faced by workers in the construction industry, who he says are consistently left out of pocket due to the lack of security payment laws and company collapses.

“Companies routinely go to work and the money they’re owed isn’t secured,” he said.

“Unfortunately the truth of the matter is there’s not a lot of legal protections for contractors in this position.

PBS has been (voluntarily) handed over to an administrator, so contractors can expect a few cents in the dollar during the administration process.

“The union is going to try and assist to its best capacity.”

Additional reporting by Kathleen Skene