Another Sydney construction company has collapsed, with Bluestone Construction appointing Jirsch Sutherland as administrators.
The owner of the construction company, which employed 25 staff, says outstanding money owed by contractors and the tough construction environment are to blame for the collapse.
Bruce Oaklands, principal supervisor and licence holder for Bluestone Construction, told SmartCompany the company’s problems began last July when it completed work as a subcontractor for Nahas Constructions. He alleges Bluestone was not paid for the work.
“We were subcontracting with Nahas Constructions and we did work with them last year and went through an adjudication and won $600,000 in January against them. Then that was disputed and we settled for $175,000, but Nahas only paid $100,000, so there is still $75,000 outstanding,” says Oaklands.
“We have basically been trying to play catch up since July last year and it has just caught up with us.
“We are just a family business trying to work through the issues. We are not a big company, but our legal advice was to put the company into voluntary administration.”
Joe Nahas, spokesperson for Nahas Construction, told SmartCompany he could not confirm nor deny whether Nahas Construction owed Bluestone Construction $75,000 or whether it owed money to other contractors.
“Bruce Oaklands has caused me so much grief,” Nahas said.
“It is a fair bit of baloney. I am not denying or admitting anything.”
Oaklands says it is “extremely tough” for the construction industry in Sydney at the moment.
“The government must do something to stimulate the construction industry because the construction industry is the back bone of the whole economy; we buy equipment, tools, petrol and motor vehicles.
“You see the really big players falling over like St Hilliers and Reeds and there are lots of small contractors like us just playing catch up.
“The government has to step in to get this sorted out because it is becoming ridiculous.”
Bluestone Construction’s 25 employees were terminated at the end of May. Oaklands says Bluestone Construction also has a winding up order against it from “workers’ compensation”.
“We are confident that we will work through the issues and get started again. There is $295,000 outstanding to the company and money in trust.”
Bluestone Construction was also hit by an industrial dispute last year involving the building of a Bunnings store in the Sydney suburb of Balgowlah.
Union representatives claimed Bluestone Construction, engaged by construction company Southern Cross Projects, failed to pay wages to numerous workers, who were then forced to find other work.
The CFMEU, which represents construction workers, established a picket line at the building site for the $20.7 million project.
CFMEU state organiser Darren Taylor said at the time that the union had been investigating Bluestone Construction Group for a year in relation to unpaid superannuation and other entitlements.
However, Oaklands says the project with Southern Cross Projects occurred after the Nahas dispute and so Bluestone Constructions carried a loss into the project and owed superannuation and redundancy payments to its employees.
“We were working with the union to try to get money in, and Nahas paid $58,000 to the unions and I directed a payment of $148,000 to that, and our accountants and the union are basically working out where that money is to be allocated,” he says.
“We have been audited by WorkCover and we are paying the correct tariff.”
The NSW Government has launched an inquiry into the state’s ailing construction industry.