Business

Company collapse: Fight on to avoid 'massive disaster'

The Queensland construction industry is on the verge of another significant insolvency.
The Queensland construction industry is on the verge of another significant insolvency. levkr

SUBCONTRACTORS are banking on negotiations now under way to protect them from the worst of another major collapse in the Queensland construction industry.

Bloomer Constructions Pty Ltd closed a number of building sites across Brisbane last week, ahead of what was expected to be an announcement Tuesday morning about the company's fate.

Instead, Wayne Bloomer, who founded the company in 1983 and is its executive director and chief executive officer, has been locked in a series of negotiations with clients and subcontractors in a bid to see projects completed and the workforce paid.

John Goddard, who heads the Brisbane-based Subbies United, said Mr Bloomer had told him he wanted to minimise the impact of the company's financial woes on subcontractors.

Mr Bloomer has been contacted for comment but has yet to respond to the Sunshine Coast Daily.

Mr Goddard said the proposal was to have Bloomer subbies complete the work with payment guaranteed by placing client progress payments into project bank accounts or trusts to ensure they got the money.

He said he believed Mr Bloomer wanted to "do the right thing by subbies".

Mr Goddard said it was his understanding Mr Bloomer was personally exposed and would lose his home as well as the considerable capital injection he had put into the business.

"This way the subbies would continue working," he said.

"All will lose something but going forward, they would have security of payment through project bank accounts.

"This could be a massive disaster or a victory for common sense.

"I think he's trying to do the right thing. They (the QBCC) should support him."

It remains to be seen whether the arrangements, if bedded in, would satisfy the Queensland Building and Construction Commission sufficiently to show discretion in relation to a show cause notice issued to Bloomer Constructions late last week.

The show cause requires Bloomer to justify within 21 days why it should retain a QBCC builder's licence which would allow it to complete the projects.

Bloomer's difficulties come at a tough time for the Queensland construction industry which, since 2013, has suffered a series of high-profile insolvencies that have left behind more than $200million in direct debts to subcontractors and suppliers and impacted on at least 3500 small businesses and their employees.

Subcontractors Alliance spokesman Les Williams said Bloomer's woes would be the third time in a month some subbies had been left unpaid for work done and materials supplied, having also been hit by the $30million Cullen Group Australia insolvency in December and the Batir Construction Pty Ltd crash owing $2million in January.

Bloomer subbies became concerned late last year as invoices weren't paid as they fell due.

The company began closing building sites across Brisbane last week with several subbies telling the Daily they had been contacted personally by Mr Bloomer, warning them to remove tools and materials.

All equipment and material on building sites, whether paid for or not, becomes property of the liquidation from the moment firms go into administration.

Bloomer's woes come as the Palaszczuk Government looks to fast-track wide-ranging reform to the sector following a root and branch overhaul of the industry regulator the Queensland Building and Construction Commission.

The Government has replaced the Queensland Building Commission board, now headed by Dick Williams, and replaced the QBCC Commissioner, appointing former ASIC Queensland Regional Commissioner Brett Bassett to the role.

An internal management structure shake-up is also under way.

Housing Minister Mick de Brenni on the weekend announced plans to introduce into Parliament legislation to strengthen the QBCC's regulatory powers, including the right to obtain warrants to enter the offices of building companies it licenses to seize records and documents.

The Government also intends to run a trial of project bank accounts next year on government contracts valued from $1million to $10million ahead of requiring them on all construction projects above $1million from 2019 in a bid to quarantine money paid by a client to the builder but owed to the people who do the actual work and supply the materials.

Bloomer Constructions (QLD) Pty Ltd was founded by Mr Bloomer in 1983 and has worked in Queensland, Western Australia, the Solomon Islands and Nauru.

It was bought by the ASX-listed Onterran Ltd in March 2015, with Mr Bloomer taking a board position and continuing to play an integral role in Bloomer Constructions as its executive director and chief executive officer.

Onterran's website describes it as "A Landscape for Success - firmly grounded on terra firma".

Topics:  bloomer construction editors picks john goddard mick de brenni onterran qbcc reform subbies united subcontractors alliance


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