This is a cash flow nightmare on another level.
BUT it’s not just unique to Australia. There are warnings of global supply chain issues, inflation, and rising costs.
The $730 million W Sydney hotel construction has halted, and everyone is down tools. This is just one of many skeleton construction sites that are coming out of the proverbial closet.
ProBuild, one of the biggest companies in the industry, has gone into administration.
What was supposed to be an iconic luxury hotel, is now a white elephant, scattered with debris, abandoned scaffolding, and reminders of what was coming. Promises of an IMAX theatre, infinity pool, and plush restaurants and bars – now just an empty carcass.
This example is a lesson on why it’s important to plan for the “long game” in construction. Weathering the storm isn’t good enough. You need to prepare for a tempest, then a drought, and then a wildfire. Throw in a hurricane for good measure.
W Sydney was due to open in 2020. Then:
- Financing issues
The downfall of one of Australia’s biggest construction companies, ProBuild, has resulted in thousands of job losses, and the inevitable snowball effect of trying to finish work, with no one at the helm.
The PR effort around the hotel’s building delay is cheerfully optimistic – “worth the wait”. But the rosey-tinted picture negates the difficulty of finding a new company to transform the building site into the cultural hub that’s been promised.
ProBuild is just the tip of the iceberg.
Metricon has had ongoing cash flow issues, and, to make matters worse, they’re dealing with the grief and impact of losing their founder, Mario Biasin. This is a cruel lesson in “when it rains, it pours”.
Condev, Privium, Next, Home Innovation Builders, and New Sensation Homes can be added to the growing list of unhappy endings, along with 328 construction firms.
The story is bleak.
But there’s a moral to take from what’s happening across Australia.
If you don’t have a safety net, it’s time to start commissioning a net maker.
That’s why we’ve introduced (at no additional cost) some safety nets into all of our reviews. We can look into your client’s financial status, if they have been in a court case before (and for what). This gives you peace of mind and the security you need to proceed with the project (or not)
A QUARTER OF ALL INSOLVENCIES COME FROM THE CONSTRUCTION INDUSTRY
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