Two Australian construction firms have gone bust, leaving creditors short of more than $4.5 billion – the latest in a wave of construction companies to fail.
PPS Qld and PPS Commercial, based in Burleigh Heads on the Gold Coast, have been placed into liquidation this week.
Salam Bettridge, 48, is the director of PPS Qld, while his wife, Raquel Bettridge, 52, is listed as the director of PPS Commercial, having taken up her role in 2022.
They have completed a number of mid-level projects including childcare centres, schools and medical centres, along with the Elements of Byron complex and the Hinze Dam visitor centre.
Liquidator Nick Keramos of McLeods Accounting said The Costa Dorada Newsletter that PPS Qld had reported its debts amounting to $1.8 million and PPS Commercial to $2.7 million.
But he added that its debts would likely rise as subcontractors, suppliers and staff learn of the collapse and file claims.
“The main reason given by the directors for the collapse of both companies is the adverse trading conditions in the construction industry,” Keramos said.
There were several unfinished projects on the agenda of both companies.
Construction companies PPS QLD and PPS Commercial have gone bust owing more than $4.5 million to subcontractors, suppliers and staff.
John Davis, from subcontractor Cadsteel, said PPS Qld owed his company about $700,000 for a townhouse project in North Ipswich.
“We were working on our project and everything was going well until they started falling further and further behind on payments and said ‘we can’t go on like this, we need to get paid,'” he said.
His lawyers filed a legal claim this month seeking to have the PPS paid while it was under external administration.
Other creditors include Harvey Norman, which is owed $50,000, and the Queensland Rural and Industrial Development Authority, which is owed $217,000.
Billy Grimes of Sunshine Coast Concreters said he was owed about $7,000.
“It may not seem like a huge amount, but we’re a small family business and it takes a long time to earn and save $7,000, so it hurts,” she said.
Nearly 3,000 construction companies have gone bankrupt in Australia over the past year, according to data from the Australian Securities and Investments Commission (ASIC).
This figure represents an increase of approximately 28 percent compared to the previous year.
According to ASIC data, almost 3,000 construction companies have failed in Australia in the past 12 months
The economic crisis is largely to blame, as the cost of materials and transportation remains high and labor shortages persist.
Builders who have signed fixed-price contracts to build projects have found that cash flow has dried up, pushing them to the brink.
“Despite high demand for housing, people aren’t going ahead with new builds because the numbers just don’t add up,” Master Builders Australia chief executive Denita Wawn told news.com.au.
“Since 2019, we have seen the cost of home construction rise by 40 percent. The delivery of new homes and related infrastructure has been hampered by ongoing and concurrent challenges.
‘Labor shortages, planning and licensing delays, draconian changes to industrial relations, inflation of materials costs, inefficient regulation, unworkable lending practices and risk allocation combine to make projects unsustainable.’