A family-run construction company has been placed into voluntary administration just before its golden anniversary and owes creditors more than $20 million.
Project Co-ordination directors informed staff at their Canberra and Wollongong offices on Tuesday that they had appointed RSM Australia Partners as administrators.
The ACT and NSW-based company has delivered projects worth more than $120 million, while future projects worth more than $90 million are in doubt.
A majority of the company’s 67 employees, 38 based in the ACT and 29 in NSW, will be made redundant and receive an immediate payout.
The company was founded in 1975 and specialized in the construction and management of public and private buildings, leaving its directors faced with a ‘soul-destroying’ decision to hand over the business.
Family-run construction company Project Coordination (photo, workshop) has gone bankrupt in its 50th year of existence, owing creditors more than $20 million
Father and son directors, chairman Paul Murphy and chief executive Gavin, said they were ‘pained about this decision’ in a joint statement shortly after informing staff.
“Despite watching other construction companies collapse around us over the past year, we never imagined we would be one of them,” the statement read.
“We thought we had the resources, order book, capabilities and industry goodwill to get through this.
“Each of us has invested significant amounts of personal money into the business in an effort to control escalating labor, material and financing costs under fixed-price contracts and very tight margins.”
The statement revealed that the company had exhausted a range of options to raise capital last Friday, describing the situation as “unsustainable”.
Mr Murphy, one of the company’s original 25 employees, said he was devastated by the collapse of Project Coordination.
“The economic and regulatory environment in which construction companies now operate is more challenging than any other environment I have experienced in the last fifty years,” said Murphy.
‘Worse than the recessions of the 1980s and 1990s and the global financial crisis of 2007/2008. Nothing has been as bad as this.”
Project Coordination is exiting the industry after previously delivering more than 900 projects across the country worth more than $2.5 billion.
The company is leaving 14 workplaces across the ACT and NSW, valued at more than $120 million, in limbo and a further $90 million in future unrealized projects (pictured, workplace)
RSM’s Jonathon Colbran, Frank Lo Pilato and Brett Lord will oversee the company’s immediate future.
A statement from the financial and advisory accounting company said work at 10 locations in the ACT and four in NSW had ceased before their appointment.
The 14 construction sites are “at various stages of construction, from design and early works to some nearing completion.”
Mr Colbran said the company was financially hampered by “losses incurred from fixed-price contracts, combined with escalating costs for subcontractors, suppliers and operations”.
An initial investigation by RSM has identified “more than 200 creditors” still owed more than $20 million by Project Coordination, the majority of which was incurred less than two months ago.