Australian contractors on the brink of collapse

Australia's construction industry is said to be on the brink of collapse, according to John Holland's CEO, Joe Barr. The building contractor reported losses of US$1bn in February and is in dispute with Transurban over who should pay for cost blow-outs caused by delays on Melbourne's AUD6.7bn (US$1.79bn) West Gate Tunnel project.

"I won’t sugarcoat it," Mr Barr told The Australian Financial Review. "Tier-one contractors in Australia are not making any money, and governments across Australia keep having successive project cost blow-outs.

"We are in the midst of Australia’s biggest infrastructure boom, but as an industry, we are teetering on the brink of collapse."

Contractors also expect to come under further financial pressure during the coronavirus outbreak. Lindsey Le Compte, executive director of the Australian Constructors Association, said contractors could struggle to deliver projects on time and on budget if materials are delayed or workers fall ill.

If southeast Asian countries introduce further lockdowns on the movement of good and people, Australia could find raw materials such as cement and concrete hard to get hold of, said Chris Melham, chief executive of the national Civil Contractors Federation.

Australian contractors are calling for the government to give them guaranteed access to raw materials over the next few months.