Building giant Grocon has called in administrators after declaring its construction business insolvent and putting the blame squarely on Infrastructure NSW’s handling of the company’s Central Barangaroo project in Sydney.
Work had already stopped on a key inner-city office site in Melbourne, with subcontractors downing tools after not being paid for many months.
However, Grocon said that its Ribbon development in Sydney’s Darling Harbour and the Northumberland development in Collingwood, Melbourne would not be included in the administration entities.
The private Melbourne-based developer was founded 73 years ago by Luigi Grollo and after his death has been run for by his grandson, Daniel Grollo.
Mr Grollo said in a statement it was unfortunate that INSW was forcing its hand to place the construction business into administration.
“While I have spoken before about moving Grocon away from the construction business model to new initiatives such as Build to Rent, I did not want to call in administrators,” Mr Grollo said.
“My desire is to pay the creditors in full. I believe we will ultimately win the case against INSW and when we do so, the creditors will be the first in line to be compensated.”
Grocon’s construction legacy in Australia’s biggest cities rivals any other private developer. But the developer has faced a series of legal challenges in the courts, most recently with property heavyweights Dexus, APN Property Group and GPT, but also its $270 million legal stoush with Infrastructure NSW.
Grocon launched fresh legal action against the NSW government in July, in an effort to compel the release of settlement documents in relation to the Central Barangaroo project.
Grocon says it is now fighting for compensation in the NSW Supreme Court after two years of attempting to negotiate with INSW, the government agency handling the precinct since the closure of the Barangaroo Development Authority (BDA) in July 2019.
In September 2020 INSW won a court order compelling Grocon to pay $1 million of security for the agency’s legal costs in order to proceed with its case, another move which Grollo says is intended to add additional pressure on the company’s financial position and force Grocon to walk away from the litigation.
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Source: Thanks smh.com