Builder operating in two Australian states collapses after 50 years in business

The majority of staff have been let go and $120 million worth of projects are up in the air following the collapse of a major building company.

A major building company has collapsed with the majority of staff being let go and $120 million worth of projects are up in the air.

Project Coordination (Australia) Pty Ltd, which had been in business for 50 years, went into voluntary administration on Tuesday afternoon.

The business had offices in Canberra and Wollongong and did construction work in the ACT and NSW.

At the time of its demise, Project Coordination had $120 million worth of projects on its books and a further $90 million in the pipeline, ready to start.

The building company had been in business since 1975, and its directors, father and son Paul and Gavin Murphy, said they had made the “soul destroying” decision to put the company into external administration.

The appointed administrators, Jonathon Colbran, Frank Lo Pilato and Brett Lord of insolvency firm RSM Australia, said that preliminary investigations show that the company owes around $20 million to more than 200 creditors.

Most of the $20 million debt the business owes to creditors was only incurred in the past two months, the administrators also noted.

Project Coordination’s 67 staff – 38 of whom are based in the ACT and 29 in NSW – have mostly been made redundant.

Only 12 have been kept on to help the administrators with their work.

Project Coordination’s collapse puts 14 building projects in jeopardy, with 10 of those based in the ACT and the other four in NSW.

The message that appears on the company’s site.

“Today we informed our staff of our decision and the painful reality that we would have to let them go,” the company’s two directors said in a statement.

“They were emotional meetings and conversations.

“A quarter of our staff have been with us for 15 years or more, with many over 20 years.”

They said they had injected their own money into Project Coordination to keep it afloat but ultimately they had to shut down because they could not source any further outside investment.

Co-director Paul Murphy, who is 72 years old and has been with the business from the beginning, said he was “devastated”.

“The economic and regulatory environment that building companies are working in now is more challenging than any other I’ve experienced in the past 50 years – worse than the recessions in the 1980s and 1990s and the Global Financial Crisis in 2007/2008,” he said.

“Nothing has been as bad as this.’’

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One of the projects posted to their LinkedIn.

Work on these sites stopped before administrators took over.

One of the administrators, Mr Colbran, said: “Despite injecting a significant amount of their own personal money into the company the directors advised me that losses incurred from fixed price contracts combined with escalating subcontractor, supplier and operating costs had negatively impacted the company financially”.

The first creditor meeting will be held on April 2.

Creditors are urged to contact the administrators via email at [e-mail] while former employees should contact RSM on [e-mail].

It’s not the first builder with sites in both the ACT and NSW to go bust this year.

Last month, Cubitt’s Granny Flats and Home Extensions, which worked across both states, went bust with debts of $6.8 million, impacting 120 projects.

A week later, three companies – Rork Projects (Holdings) Pty Ltd, Rork Projects (QLD) Pty Ltd and Rork Projects Pty Ltd – that made up the Rork Group went into administration. Those companies have specialised in refurbishment for the past 26 years, with 63 current projects across NSW, the ACT, Victoria and Queensland.

News.com.au has reported on dozens of builders going into administration and liquidation over the past two years.

In times of economic hardship and inflation, building companies are usually the first to feel the pinch as they run on such small margins.

A staggering 2349 construction firms have collapsed in the past year — with fears more may fall soon.

Indeed, of the 8471 business collapses for 2023, almost 28 per cent were in the building and construction industry, according to data put out by the corporate regulator.

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Originally published as Builder operating in two Australian states collapses after 50 years in business