Home Business Australian contractor Clough’s collapse leaves more than $8 bln in projects in limbo

Australian contractor Clough’s collapse leaves more than $8 bln in projects in limbo

9 min read
Comments Off on Australian contractor Clough’s collapse leaves more than $8 bln in projects in limbo


Article content

MELBOURNE — More than $8 billion worth of gas, power, rail and mining projects across Australia, Mongolia and Papua New Guinea face delays following the collapse of engineering firm Clough on Monday.

Projects that could be hit include the expansion of the Oyu Tolgoi copper mine in Mongolia, run by Rio Tinto , and major power plant and transmission projects essential to maintaining a stable grid in Australia from 2023.

Article content

Clough, with a global workforce of 2,500, was placed into voluntary administration by its South African parent, Murray & Roberts Holdings, after a deal to sell the business to Italian construction giant Webuild SpA fell through.

Advertisement 2

Article content

Deloitte, appointed as administrator, said it would assess Perth-based Clough’s financial position over the next two to three days and begin an accelerated sale and recapitalisation process, aiming to get projects back on track.

It said the goal is to source “immediate interim funding to be able to continue work on as many projects as possible as quickly as possible.”

Webuild and Clough are partners on a A$5 billion ($3.4 billion) rail project in Australia’s Queensland state and the A$5 billion expansion of Australia’s biggest hydropower scheme, Snowy 2.0, which is already facing a delay of nearly two years into 2028.

Government-owned Snowy Hydro said it was working to ensure Clough’s workers involved in the Snowy 2.0 project stayed on the project and a spokesperson for Energy Minister Chris Bowen said he had been told that none of the blue-collar workers on site were employed through Clough.

Advertisement 3

Article content

“We are working closely with the joint venture to ensure construction on the project progresses smoothly,” a Snowy Hydro spokesperson said.

Clough is also handling construction of the A$768 million ($515 million) Waitsia Stage 2 gas project, owned by a unit of Japan’s Mitsui & Co and Australia’s Beach Energy .

The Waitsia Stage 2 project was due to start producing gas for export through the North West Shelf liquefied natural gas (LNG) plant in late 2023. Mitsui said it would work with all its partners to ensure the project proceeds.

“Given that an administrator has only just been appointed for Clough, it would be premature to speculate on the precise impacts for the Waitsia Gas Project Stage 2,” Mitsui E&P Australia said in a statement.

Advertisement 4

Article content

Clough is also the contractor on a key project needed to shore up Australia’s power supply, the 320 megawatt (MW) Tallawarra B gas-fired power station owned by EnergyAustralia, a unit of Hong Kong’s CLP Holdings.

An EnergyAustralia spokesperson said the company would work with stakeholders, including General Electric Co and the administrators, to enable construction to continue so it could “play its part in ensuring the lights stay on in summer 2023/24.”

Another major project involving Clough is a 900 kilometer power transmission line, EnergyConnect, owned by TransGrid, essential for hooking new solar and wind farms to the grid.

TransGrid said it would work with Clough’s partner Elecnor to deliver the A$2.3 billion project and expects to meet its completion deadline of late 2024.

Rio Tinto had no immediate comment on the impact of Clough’s collapse.

($1 = 1.4901 Australian dollars) (Reporting by Sonali Paul; Additional reporting by Praveen Menon in Sydney; Editing by Kenneth Maxwell)



Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.


Source link

Load More Related Articles
Load More By 
Load More In Business
Comments are closed.

Check Also

China’s Jan factory activity contracts at slower pace – Caixin PMI

[ad_1] Breadcrumb Trail Links PMN Business Article content BEIJING — China’s factory activ…