Ararat prison firm enters administration
14 June 2012
The consortium building the Ararat prison PPP in Victoria, Australia, has entered voluntary administration following the collapse of one of the construction partners.
Contractor Bilfinger Berger confirmed that it had appointed a voluntary administrator to the Aegis Correctional Partnership consortium, which ran into difficulties in May when St Hilliers Contracting fell into insolvency.The collapse of the construction firm led to work on-site being halted, as it was reported that the firm had told its subcontractors not to invoice for work because there was no money.
“Within the short timeframe available, the affected project parties have not been able to agree on a joint way forward and the project company thus appointed a voluntary administrator,” Bilfinger Berger said.
“Due to these events, the Group will fully write off its equity investment of €15m [US$19m],” it added.
The future of the project is now unclear, although Victoria’s Department of Justice has insisted that the prison will be built – albeit later than planned.
“Under the contract the department is under no obligation to make payments to the consortia until the services phase of the project and does not intend to relieve the private sector of its substantive obligations under the contract,” a spokesperson for the department said in May.
