Plea for help as company involved in new Sydney Fish Market collapses

Construction giant Multiplex is seeking urgent government support to prop up subcontractors at the $836 million Sydney Fish Market development, following the collapse of the firm tasked with fabricating the building’s iconic wave roof.

Sharvain Facades, which engineered the rippling facade on the Chau Chak Wing Building at UTS and the web-like cladding on the award-winning AMP building at Circular Quay, went into voluntary administration in early March owing tens of millions of dollars, two weeks after the final panel on the 200-metre roof was installed.

The final panel in the wave-like roof was installed in mid-February.Credit: Multiplex

Managing director Boris Kostura said the company’s situation was predominantly attributable to the two-year extension to the construction timeline at the Sydney Fish Market, during which time material and labour costs increased rapidly, and some almost doubled.

“The perimeters, program and prices have changed far beyond what could have been anticipated,” Kostura said.

“We hung in for a very long time. It was simply not possible to complete such a complex project for the original budget.”

In October, Multiplex extended the company a $16 million loan to complete the project and is now listed among its creditors. Kostura said he regretted agreeing to the loan.

“Our intention was not to be a roadblock, but rather to be part of the solution,” he said.

The company is among several subcontractors driven to the brink of financial ruin within the contractual chain at the Sydney Fish Market that have gone into administration, and many more that have struggled to keep up with rising costs, as ongoing disputes over the design and functionality of the new building have contributed to construction delays.

The fish merchants who rent premises at the current site have claimed the new building was not fit for purpose, forcing variations to the scope of the project after the contract was signed between Multiplex and the NSW government. They are still refusing to sign their new leases, raising the prospect of further delays as they cannot enter contracts with builders until that is done.

The timeline has also been set back by COVID work restrictions, wet weather and the collapse of a crane jib in 2023 that stopped work for three weeks and slowed it down for months.

Inside the new Sydney Fish Market building which is expected to open later this year. Credit: Edwina Pickles

Paragon Plumbing director Brooke Fleming said his costs on the project were 33 per cent over budget and struck a $1 million loss on Tuesday.

“It’s the worst job I’ve done in 24 years,” Fleming said. “If we didn’t have any other work, it would have taken us.”

The Herald is aware of two other subcontractors wearing losses of $6 million and $7 million, respectively.

Multiplex said in a statement that it was meeting with Sharvain’s administrator and Infrastructure NSW to assess the impact of the company’s collapse on the development, and seeking an urgent meeting with NSW Treasurer Daniel Mookhey.

Although Multiplex was up-to-date with its subcontractor payments, it was aware of other subcontractors, builders and suppliers involved with the Sydney Fish Market who were owed money and struggling financially due to the “hyper-escalation” of construction costs.

“We would welcome any additional support from the NSW government,” the statement said.

NSW Treasurer Daniel Mookhey said through a spokesman he had not been approached.

Construction was expected to be completed by 2024 when it began in 2021, but the opening date has been pushed back to November 2025, and may run into next year to avoid interruptions to trading over the busy Christmas period.

The National Electrical and Communications Association has been lobbying the government since 2023 to support subcontractors affected by the construction delays.

Its chief executive Oliver Judd said the delays pre-dated COVID and subcontractors were forced to foot the bill.

“The handling of this project has sent several contracting businesses to the wall and the government continues to add pressure with rigid and unfair contract terms and a scope that is now vastly different,” Judd said.

“These contracts, which many feel compelled to sign, see subcontractors shouldering the overwhelming majority of risk, and being unfairly expected to wear the losses for delays, price increases, design changes and insolvencies occurring within the contractual chain.”

But Infrastructure NSW said the management of contractors was a matter for Multiplex. The government had met its contractual obligations to Multiplex and was up to date with its payments, an INSW spokeswoman said.

A spokesman for NSW Lands and Property Minister Steve Kamper said the project was in a state of “morbid paralysis” when the government inherited it.

“We are working with Multiplex to get this project back on track and delivered within the existing budget.”

The delays have contributed to a mutinous environment at the Sydney Fish Market, where management recently increased a buyer’s fee designed to subsidise building maintenance from 2.2 to 3.5 per cent. The fee is levied on commercial buyers for each seafood product they purchase at the daily auction.

Management has declined to comment on whether it will continue to levy the fee at the new site where the repair bill is expected to be lower than the one racked up at its current dilapidated site.

It said through its external PR firm that buyer service fees were commonplace among auction houses to cover service and administration costs and that its fees were capped at $50,000 per year.

Sydney Fish Market’s financial statements are now four months overdue, with auditors refusing to sign off on the accounts due to concerns that the company may not be able to pay its debts when they fall due, as a result of the increased cleaning, insurance and operational costs at the new building.