Workers employed by Hewatt Earthworks have been told to stand down as the subcontractor on the $288 million Majura Parkway extension formally enters voluntary administration with PPB Advisory.
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Much of the activity on the capital's biggest construction job on the project halted on Wednesday morning amid fears that a deal struck between Fulton Hogan, the head contractor, and Hewatt Earthworks had collapsed.
PPB Advisory partner Christopher Hill announced on Thursday that Hewatt Earthworks had gone into administration. He said it was unfortunate workers had to be stood down, although the construction company was no longer in a position to employ them.
"Over coming weeks, we will work constructively with management, employees, subcontractors, suppliers, clients and relevant union and government bodies to assess options for the future of the business,” he said.
Hewatt Earthworks managing director Geoffrey Hewatt said he would try to meet most of his employees in the Canberra region to discuss the company's future.
“I want to be transparent with my employees as I’ve got workers who have been with me for 20 years,” he said.
“Between now and then we will have to work out what we tell them.
“We’ve been in contact with most of the employees but obviously there are some who are still removing machinery and equipment into sheds and shipping containers so we can get the best for our creditors”.
Mr Hewatt said project manager Fulton Hogan had asked his company to vacate the construction site and withdraw from the project on Wednesday afternoon.
Mr Hewatt said project manager Fulton Hogan contacted him about 3.30pm saying his “services were no longer required”.
“After a long hard battle with a very stubborn partner we have a result,” he said. “They’ve asked us to leave the Majura Parkway”.
It's understood Hewatt Earthworks began withdrawing its big machinery from the site on Wednesday morning.
Fulton Hogan project director Malcolm Thomson said his company had not terminated Hewatt's contract on the Majura Parkway or asked it to vacate the site, despite Mr Hewatt's claims.
“Our first preference has always been to complete the project in conjunction with Hewatt,” he said. “However, we understand it is unlikely they will be able to complete their contractual commitments.”
He said at no time had there been a contractual dispute between Fulton Hogan and Hewatt Earthworks.
Deputy Chief Minister Andrew Barr said the withdrawal of Hewatt Earthworks would not delay the completion of the parkway , as Fulton Hogan would continue the work.
"In fact, I understand that about 95 per cent of the work that Hewatt was subcontrated to undertake has been completed," he said.
A Territory and Municipal Services Agency spokesman said "Fulton Hogan continues to provide assurances to the government that they will deliver the project on time and on budget."
Mr Thomson said Fulton Hogan would look to employ Hewatt Earthworks' subcontractors, many of them local to the ACT, as well as looking to hire some of the 70 affected members of the workforce, to work directly for Fulton Hogan on the project
The Canberra Times revealed on Monday that the job was in crisis with Hewatts losing hundreds of thousands of dollars each week and threatening to walk away.
Crisis talks in Melbourne on Monday with Fulton Hogan cobbled together a temporary fix in return for a cash injection for Hewatt Earthworks, which is believed to owe tens of millions to suppliers and contractors around Canberra.
But it is believed that the compromise collapsed on Tuesday evening, leading to the stop-work.
At 10.30am on Wednesday, about 30 workers met with Hewatt Earthworks and the CFMEU at the site.
The Canberra Times was kept out of the meeting, with gates closed and a car radio turned up to full volume to drown out the discussions.
After the meeting, CFMEU assistant secretary Jason O'Mara said the union was "going to take stock and see where we are at, and make sure all workers' entitlements are paid in full and everyone is going to be looked after."