According to a new report, the NSW government is struggling to prepare a rescue package for Metricon while the troubled builder goes bankrupt.
According to a new report, the NSW government is struggling to prepare a rescue package for Metricon as the troubled builder staggers into bankruptcy.
Metricon, one of the largest construction companies in the country, has denied speculation that it is in financial difficulties after the shocking death of its founder Mario Biasin last week, days before talks on crisis with the Victorian government.
Acting CEO Peter Langfelder has insisted it is “as always” for the company, which employs about 2,500 workers and has a pipeline of thousands of homes under construction.
But The Australian reports that senior NSW government officials fear the builder is at risk of imminent collapse and are struggling to finalize a bailout package for the construction industry and state customers.
The NSW building regulator has already sought advice on the involvement of recipients, according to the newspaper, which also reports that, contrary to its public statements, sources familiar with the company’s finances say that the cash flow it is still serious and the business is in bankruptcy.
Seconds The Australiansenior NSW government officials, including the office of Prime Minister Dominic Perrottet, held meetings on Thursday to examine rescue proposals.
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One would be a bailout package worth hundreds of millions of dollars to prop up construction industry players at risk of collapse due to growing problems affecting the sector, including rising costs of essential materials such as wood and steel.
Another package would go to Metricon to complete some 300 active constructions or to compensate buyers of packages of houses and land that cannot be completed.
Metricon and the NSW government have been contacted for comment.
It has previously been estimated that taxpayers may have to shell out more than $ 28 million to rescue families left with unfinished housing in NSW alone if the business falls, potentially overwhelming the Housing Construction Compensation Fund. the state, which covers up to 20 percent of the cost of the contract.
In each state and territory, there are similar schemes run by the respective governments that could see the cost to taxpayers increase further in the event of a collapse.
Claims of up to $ 200,000 can be made in Queensland, where Metricon has carried out 1006 home construction jobs so far this year.
Claims of up to $ 300,000 can be made with a similar scheme to Victoria, where a collapse of the construction giant would cause chaos.
There, Metricon has $ 195 million worth of contracts with the state government, including a five-year deal to build and maintain public housing as part of Victoria’s ambitious “big building” infrastructure program. .
In total, Metricon had 6,052 homes under construction nationwide in 2020-21.
Its projects in Queensland alone are worth more than $ 400 million, according to records from the Queensland Construction and Construction Commission.
Rumors about the future of Metricon began to circulate last week after the death of its founder.
Biasin died unexpectedly last Monday at the age of 71, after suffering from mental health problems.
Last week, Langfelder dismissed rumors surrounding the company, although he admitted that the company was experiencing some delays in projects.
“We have a strong track record of performance, all of our existing contracts are profitable, we are fully up to date with all our trades, our suppliers, our employees, the commissions, everything is completely up to date,” he said.
“In terms of our business, this is what is common. Our business has been very strong for 45 years and will continue to be so [be] for a long time. ”
The company tried to reassure customers in a panic in an email last Thursday that spoke of “baseless rumors” that it was having problems.
“We wanted to get in touch after media speculation about the future of our company,” the email said.
“Today we have reaffirmed our long-term viability, following the sudden death of co-founder and CEO Mario Biasin on Monday through a media release. Our screens remain open for normal business and our new advisors for the “Our home CEO Peter Langfelder has been in the media this afternoon in an effort to put an end to baseless rumors.”
But many of its customers and employees remain concerned about its future.
A Queensland couple who signed a contract with Metricon for the construction of their home near Ipswich said they had not received information about the state of their construction, and the company told them in a statement to the media. in response to questions.
Emily Martin told Nine News that she had signed a contract with Metricon in November, but was unsure when construction would begin.
“Between our land depot and the house depot we have $ 38,000 in our pocket, and we are not in a month after construction begins,” he said.
Speculation surrounding Metricon follows the collapse of construction giants Condev and Probuild earlier this year.
On Thursday this week, another major Queensland builder, Pivotal Homes, went into liquidation and left 200 unfinished home constructions.
Industry expert Adrian Hart said it was the most difficult time in construction in 50 years.
“The feedback we are receiving is the worst experience they have ever had in terms of cost and capacity challenges, and that includes rising resources,” BIS’s head of construction and infrastructure told 7News.com.au Oxford Economics.
“You have to go back to the oil shock of the 1970s to get an idea of the kind of price hike we’ve seen in the industry right now. It’s the worst experience we’ve had in the industry, end point.”
– with Ben Graham and Sarah Sharples