The crisis in the New South Wales construction industry continues with yet another bankruptcy last week.
The latest victim is Southern Cross Construction, a commercial builder with 39 staff members and four projects underway, including a Bunnings Warehouse and Woolworths at Balgowlah in Sydney’s North.
Late last week, the company announced it had appointed accounting firm Cor Cordis for the group.
While the administrators, who are set to meet with some of the building company’s creditors on November 5, say most of the projects are near completion, a statement from Cor Cordis on Friday said the future of the company’s workforce remains unclear and it is too early to make any statements about the group’s financial position.
All in all, around 600 creditors are said to be owed around $17 million.
The latest collapse comes amid a New South Wales government inquiry into insolvencies in the sector which follows what New South Wales finance minister Greg Pearce refers to as the collapse of ‘hundreds’ of builders over the past three years which left more than 24,000 unsecured creditors shortchanged on money owed to them.
That inquiry followed the collapse earlier this year of Reed Constructions which sees more than one-thousand creditors, many of them subcontractors who will now go unpaid for work on government infrastructure projects, likely to receive virtually nothing of the $89.2 million collectively owed to them.
There are fears of further corporate failures within the sector as a combination of low demand and tight selling conditions places enormous pressure on output prices and margins.