Giant on brink of crash
UP TO $1bn worth of construction projects in Queensland are hanging in the balance as construction giant Condev calls on developers to throw it a financial lifeline.
There are growing fears Condev, which has hundreds of millions of dollars worth of projects across South East Queensland, could be the latest major builder to fail.
A meeting this afternoon between Condev and developers will seek to formulate a rescue plan for the company, hit by a “perfect storm” of labour shortages, floods and skyrocketing material costs.
According to the Queensland Building and Construction Commission, Condev, which employs 125 people, is licensed to complete projects totalling $240m each year making it one of the biggest construction firms in the state.
Condev’s problems come only weeks after the collapse of Melbourne-based Probuild leaving scores of unfinished projects around the country.
Queensland’s biggest construction union described Condev
as a “collapse waiting to happen.”
But the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) claims Condev’s business model was flawed and left it vulnerable to rising material costs and recent floods. State secretary Michael Ravbar said a “combination of underbidding on jobs, poor project management and quality control” meant Condev was “a collapse waiting to happen”.
Subcontractors were seen removing tools and equipment from Brisbane’s Kangaroo
Point on Monday where Condev is building a 12-storey, 124 apartment high-rise for the Aria Property Group. Trucks were parked on the footpath outside the Rivière development in Main St with workers loading gear and materials into the back.
The Monday meeting including major developers from all over Australia, will discuss how projects can be completed without causing further financial loss to Condev.
WTC Advisory managing partner Andrew Weatherley said he heard Condev had “some challenges” and the meeting with developers was a “unique approach”.
“The alarm bells have rung and they might find people hesitant to deal with them going forward which would compound the problem,” Mr Weatherly said.
“But from a developers point of view, if it was not a substantial amount of money it would make sense to support them to a point because of the delays that you’d suffer because the clients have to find another builder to complete the projects.
“Whether that is sufficient enough remains to be seen.”
Condev, which helped build much of the 2018 Commonwealth Games infrastructure, has 13 projects currently under construction in South East Queensland, with six on the Gold Coast.
The Gold Coast projects are valued at more than $500m.
Condev was founded in 2002 by Steve and Tracy Marais. Ms Marais said the company was still solvent but needed help to navigate an increasingly hostile environment in the building sector.