Clough executives head for the exit amid project strains

Clough has lost two top executives, the latest raft of departures to hit one of Australia’s oldest civil construction companies amid an ongoing cash crunch on several energy projects.

Clough is building the giant Snowy 2.0 expansion scheme but faces broader financial and project pressures within the company.

Clough has lost two top executives, the latest raft of departures to hit one of Australia’s oldest civil construction companies amid an ongoing cash crunch on several energy projects.

The Perth-headquartered company, which is building the federal government’s giant Snowy 2.0 hydro scheme, has lost its executive vice-president for North America, Adam Stashick, and Canadian general manager Nathan Grob, sources said.

Mr Stashick, a member of Clough’s executive committee team, stepped down recently after only being appointed to the role in June. Mr Grob departed after just over a year in his position.

Clough’s North American division has been under the spotlight after its parent company, Murray & Roberts, flagged a major earnings downgrade this month amid an “acute” cash crunch at the embattled contractor.

Murray & Roberts pointed the finger at Clough’s engineering contracts on the $US650m ($1bn) petrochemicals plant under construction in Texas, called Project Traveler, in addition to the Mitsui-operated Waitsia gas project in Western Australia

The pairs’ exit continues a recent period of high turnover among staff at Clough.

Half a dozen senior executives, including chief financial officer Richard Simons and group general council Christian Ainslie, have left the civil engineering contractor since June.

Since then the company has also lost the services of Mr Stashick’s predecessor, Martin Siddle, vice-president of its US business, and the boss of its WA and Asian operations, Paul King.

Clough has appointed Thomas Anderson as a replacement for Ms Stashick, who was previously managing director of e2o, a specialist engineering firm owned by the WA company.

Clough has put itself up for sale, opening a dataroom that has attracted a suite of major rivals including Italy’s Webuild as it looks for a corporate white knight ahead of a rumoured crunch point in its finances.

Clough chief executive Peter Bennett.

A sale would arrive at a time of growing pressure on contractors in Australia. High raw material costs and low-ball bidding, exacerbated through some projects such as Snowy 2.0 striking fixed price deals with contracting firms to limit their cost exposure, has piled pressure on many operators.

If a deal for Clough does proceed, it would hand Webuild a multibillion-dollar order book in addition to high-profile projects including Melbourne’s North East Link road scheme, the Perth rail link and the Inland Rail development.

However, a deal would also up the stakes for WeBuild to deliver on several critical energy projects amid fears more delays in executing the Snowy 2.0 expansion may further derail an already volatile electricity system.

The most high-profile development, Snowy 2.0, has seen Clough and WeBuild’s Future Generation joint venture saddled with an extra $2.2bn in cost overruns due to a Covid and supply chain hit, threatening the profitability of the scheme and causing an 18-month delay.

Snowy last week confirmed it was in talks over contractor claims with Clough and Webuild.

In addition to Snowy 2.0, Clough is a joint venture partner with Elecnor in a $1.5bn contract to build Transgrid’s EnergyConnect project, designed to provide a link between the South Australian and NSW energy grids and open up the national electricity market to new sources of renewable power. EnergyConnect is already delayed by up to a year which, combined with the Snowy hold-up, has led to forecasts that Australia faces an escalating risk of blackouts in its power grid over the next few years.

It also faces pressure to deliver the state’s Waitsia onshore gas project after owners Mitsui and Beach Energy said it expected first supplies to be delivered from the facility on schedule in 2023.

The company has a $US2.7bn ($3.9bn) contract held in a joint venture with Saipem, to design and build the Perdaman Chemicals urea plant in the Pilbara, with a potential green light for the project due before the end of 2022.