Hundreds of subcontractors fear they will be out of pocket following the collapse of the Grocon construction company on Friday.
The company which was founded in 1954 called in administrators on Friday.
Grocon CEO, Daniel Grollo, blamed state government agency, Infrastructure NSW, for the collapse claiming it has mishandled the Central Barangaroo project.
“It is unfortunate that INSW is forcing our hand to place the construction business into administration,” Grollo said.
The national construction secretary of the CFMEU, Dave Noonan, said Grocon’s collapse means it was unlikely the company’s many subcontractors would ever get paid.
“People can draw their own conclusions about Daniel Grollo’s leadership,” he said.
“Obviously he takes the view that it’s everyone else’s fault.”
Noonan said the construction industry was sick of big companies “constantly going under, owing millions of dollars to subcontractors.
“In nearly all instances it is small businesses and subcontractors who do the majority of the work on sites, but it is the big developers who hold back payments," Noonan said.
“This is a massive rort that has been besetting the industry for decades. The latest Grocon collapse is just like Groundhog Day for anyone who has been around the construction industry for any length of time.”
The Federal Government commissioned John Murray, former CEO of Master Builders Australia and a former construction lawyer with decades of experience to investigate the widespread industry practice of non-payment or late payment of money owed for work done.
The Murray Report made 86 recommendations around national security of payment laws and the introduction of statutory trusts which the government has been sitting on since 2017.
Les Williams, from the advocacy group Subcontractors Alliance, agreed thousands of subcontractors might never see the money they’re owed.
“These are small businesses that are just hung out to dry. It’s a disgrace,” Williams said.
Grollo said he planned to pay the company’s creditors in full.
“I believe we will ultimately win the case against Infrastructure NSW and when we do so, the creditors will be the first in line to be compensated,” he said.
Grocon has become embroiled in legal disputes across three states.
He is battling Infrastructure NSW in court over permitted building heights at Barangaroo.
The company has also been embroiled in multimillion-dollar legal cases with commercial property heavyweight Dexus in the Queensland courts and APN Property in Victoria.