Topic: Construction News

Alpha Building Group collapses. One of 2349 builders to fail in 2023 can reveal that last Thursday, Alpha Building Group Pty Ltd went into liquidation.

All staff have been sacked and 10 homeowners across the Greater Melbourne area have been left with unfinished projects following the company’s demise.

Brent Morgan of insolvency firm Rogers Reidy, the appointed liquidator, told that more than 100 creditors are owed $3.5 million.

About $2.5 million of that is from material costs while sub-contractors are owed just under a million and consultants are owed “a small amount” of between $15,000 to $20,000.

Three days before Alpha went bust, on January 15, understands that a staff member tried to attend their workplace but were turned away as the company had ceased trading.

Blake*, a dad-of-three, has been left devastated by the news, with fears his plans for a $1.8 million dream home have gone up in smoke.

“Me and my wife have been saving for six years, we’ve just started a new business, it’s really come at a terrible time,” the 39-year-old homeowner told

To date, the family have paid $350,000 to Alpha by way of progress payments, causing him to lament “all we have to show for it is a slab of concrete”.

All that has been built on Blake’s site. Picture: supplied to

All that has been built on Blake’s site. Picture: supplied to

The email that spelled the beginning of the end for the builder. Picture: supplied to

Looking back, Blake can see some signs that all was not right with the builder.

Around Christmas time, Alpha Building Group informed customers they would be returning from the end of year break on January 8.

But when Blake sent them an email once this period was up, he received a bounce back saying they would be returning on January 22.

“There was sort of doubt in my mind (after that),” he said.

Blake said he had been emailing the construction firm for months after paying them a progress claim in late November.

He said after the payment, no more work happened on his site.

The young dad, with three kids under the age of nine, also said in the days leading up to the liquidation appointment, the company’s phone number became disconnected.

The liquidator, Mr Morgan, said the reasons behind Alpha’s collapse “tells the story we’ve been hearing for some time”.

That includes rising costs of labour, increasing prices of materials, onerous government taxes and a general lack of profitability.

He said in June last year, Alpha had seven staff but this had dwindled down to just one, aside from relatives of the directors, by the time it went under.

The Victorian-based construction firm, headquartered in the Melbourne suburb of Camberwell, has been a registered business for nearly two decades, since 2005.

It was directed by Dean Amendola and Bruno Merlino. attempted to contact the directors for comment.

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An Alpha Building Group home. Picture: supplied to

An Alpha Building Group home. Picture: supplied to

Alpha Building Group has gone bust. Picture: supplied to

Alpha Building Group has gone bust. Picture: supplied to

Alpha Building Group is one of the first large building companies to go bust in 2024, after a hellish two years for the construction industry.

Last week, reported on another Melbourne builder, Montego Homes Pty Ltd, plummeting into voluntary administration.

A staggering 2349 construction firms have collapsed in the past year — with fears more may fall soon.

In times of economic hardship and inflation, building companies are usually the first to feel the pinch as they run on such small margins.

Indeed, of the 8471 business collapses for 2023, almost 28 per cent were in the building and construction industry, according to data put out by the corporate regulator.

The alarming trend has been blamed on a “perfect storm” of factors, including fixed price contracts, escalating costs, supply chain disruptions and tradie shortages.

The previous Morrison government’s HomeBuilder grant, which was introduced in June 2020 and handed out $2.52 billion to owner-occupiers who wanted to build or substantially renovate a home, turbocharged the sector.

More than 130,000 customers signed on for the program, with many tradies agreeing to the work under fixed-price contracts that soon became unsustainable as prices began to soar.

Shamefully, in 96 per cent of cases where small and medium sized businesses go under, only between zero and 11 cents is recovered for every dollar owed to out-of-pocket creditors.

Last name withheld over privacy concerns*

Read related topics:Melbourne


Home builder Porter Davis collapses affecting 1,700 homes, LLoyd Group enters voluntary administration
By Zalika Rizmal.

Some Porter Davis customers have been left with little more than a concrete slab, with construction on homes stopped across all of the major builder’s projects.

Victorian-based home builder Porter Davis is going into liquidation, while a second construction firm has entered voluntary administration.

Key points:
Porter Davis’ liquidators are looking for builders to take over customer contracts
Dozens of public building projects are at risk in New South Wales and Victoria
More than 600 employees across both companies have been affected
Construction has been suspended on all Porter Davis’ projects, with 1,700 homes affected across Victoria and Queensland.

The construction company has about 470 employees and was forecasting revenue of $555 million in the 2023 financial year.

Customers and other creditors are being told to contact the liquidator Grant Thornton, as it investigates the reasons for the builder’s collapse.

A spokesperson for the liquidator said the company ran out of options.

“The extremely challenging environment for the residential home building has directly contributed … with rising input costs, supply chain delays, labour shortages, and a drop in demand for new homes in 2023 impacting the Group’s liquidity,” the spokesperson said in a statement.

“Notwithstanding the financial support from shareholders and lenders, the Group has exhausted options to secure the further funding required to allow Porter Davis to continue to operate viably.”

Rising material costs, labour shortages and interest rate increases have led to cost blowouts, putting mounting financial pressure on builders.
Construction on all current Porter Davis builds has been suspended immediately, with 1,500 unfinished homes in Victoria and another 200 in Queensland.

There are also around 780 projects under contract, where construction is yet to begin.

The liquidator said it was “working urgently” to find a solution for customers and employees, including by contacting potential interested parties willing to take over the customer contracts.

Porter Davis’s collapse is the latest in a long string of construction companies, with experts warning companies across the country will continue to go broke as material costs and interest rates keep rising.

John and his family are among thousands of Porter Davis customers who have been left with an unfinished home and an uncertain future.

The family invested their life savings to build a five-bedroom house in Melbourne’s outer-northern suburbs.

Just last week, John received a call from Porter Davis confirming the house frame was going to be delivered within weeks.

“We were hoping to be in before Christmas this year,” he said.

This morning, John found out on social media that would not be happening.

All the family has been left with at the site of their dream home is a concrete foundation.

“I was very disappointed. This is a million-dollar home that we’re building, I actually would have liked a little bit more notice,” he said.

With the family of five currently staying in cramped quarters with his in-laws, John said he was worried about their future.

“First we have to look for somewhere else to live, I guess,” he said.

A concrete slab foundation
This is Porter Davis customer John’s unfinished house in Melbourne’s north. (Supplied)
Lloyd Group enters voluntary administration

The collapse of the Victorian-based builder comes as another Victorian construction firm, Lloyd Group, called in voluntary administrators amid financial woes.

The Port Melbourne-based builder specialises in infrastructure projects for state and local governments, primarily in Victoria and New South Wales.

Construction firm Lloyd Group specialises in public building projects, such as the 2021 redevelopment of the Burrinja Cultural Centre in Melbourne’s south east. (Lloyd Group)

The appointment will affect more than 200 employees and 59 projects under construction, including 29 in Victoria and 30 in New South Wales.

“Despite significant effort, Lloyd Group has been unable to overcome increasingly challenging circumstances over recent months that have eroded project margins, Deloitte voluntary administrator Sam Marsden said.

“We will be undertaking an urgent assessment of the business’s financial position and project-by-project status.”

Mr Marsden said administrators would begin an “accelerated sale process” while speaking with with potential parties interested in taking on individual projects.

Dozens hospitalized after fire engulfs 33-story apartment building in South Korea

Dozens hospitalized after fire engulfs 33-story apartment building in South Korea

The fire broke out at the 33-story building around 11 p.m., and continued burning through Friday morning, authorities told CNN. Photos of the scene show black smoke billowing above the building, and blackened debris scattered along the street.There have been no deaths reported so far.

NSW unit owners voice anger at industry

A resident of one of Sydney’s several evacuated apartment buildings has broken down in tears before a parliamentary inquiry when describing the uncertainty he and his young family are now facing.

Vijay Vital, who was evacuated from Sydney’s Mascot Towers on June 14, was overcome with emotion when he addressed the NSW Legislative Council inquiry into the state’s building standards on Monday.

Vijay Vital wipes away tears after delivering his opening statement to the NSW upper house's inquiry into the state's building standards.
Vijay Vital wipes away tears after delivering his opening statement to the NSW upper house’s inquiry into the state’s building standards.CREDIT:AAP

“I stand here as a parent as well; my daughter asked me, ‘When can I go home?’ ” Mr Vital said.

The upper house committee heard from several residents affected by mass evacuations in recent months as well as bureaucrats still working to implement laws passed by the government last year.


WA – Elizabeth Quay towers plagued by leaks and building defects

Elizabeth Quay towers plagued by leaks and building defects

Mark GibsonToday Tonight
Leaks and building defects have been revealed in Elizabeth Quay’s multi-million dollar apartment complex.

It has been labelled Perth’s most exclusive new address but the multimillion-dollar apartment towers at Elizabeth Quay have been plagued by leaks and building defects, with some owners refusing to move in and demanding compensation.

Buyers started receiving the keys in March, only to discover what they describe as poor workmanship, some listing hundreds of defects in apartments they paid more than $2 million for.

The West Australian has observed internal defects including crooked walls, broken sewage pipes, uneven paintwork and extensive chips, scratches and stains on walls, floors and window frames.

The developer, Hong Kong company Far East Consortium, described the faults as “normal”.

Defects at Elizabeth Quay Towers.
Defects at Elizabeth Quay Towers.Picture: Today Tonight
Defects at Elizabeth Quay Towers.
Defects at Elizabeth Quay Towers.Picture: Today Tonight

“Minor defects and workmanship issues are an unfortunate reality for even high-quality projects. All defects that have been identified are being fixed,” Far East Consortium’s WA State manager Dan Sweet said.

One owner, who asked not to be identified, described the development as an unfinished construction site. Seven weeks after settlement, the couple are refusing to move in until 200 defects are rectified in their apartment. They intend to seek compensation for thousands of dollars in strata fees and council rates they’re paying for an unoccupied apartment.

The complex is also suffering water leaks in the basement carpark, which a leading Perth engineer described as “avoidable.”

A machine has been brought in to inject a chemical into the cracks, but Peter Airey of Advanced Substructures said the cracking would be an ongoing problem.

Mr Sweet said the remedial works were a “permanent solution”, “minor in nature” and in “no way compromise the structural integrity of the building”.

Defects at Elizabeth Quay Towers.
Defects at Elizabeth Quay Towers.Picture: Today Tonight

International engineering firm WSP, which worked on The Towers at Elizabeth Quay, was also responsible for work at the Opal Tower in Sydney. Residents there were forced to evacuate when extensive cracking appeared at Christmas.

An investigation found design and construction faults. There is no suggestion Elizabeth Quay residents face any danger.


Apartment owner accuses ACT government of lax approach to regulating building quality

The ACT government’s lax approach to regulating building quality has “emboldened” developers, builders and contractors to cut corners and deliver substandard work, an Assembly inquiry has heard.

Access Canberra has also been accused of being a “friend of industry” rather than a “feared regulator”, as the government agency came under fire during the second day of public hearings at the ACT Assembly’s building quality inquiry.

Kingston Place resident John Grant, who appeared at the ACT Assembly's building quality inquiry on Wednesday. Picture: Jamila Toderas

 Kingston Place resident John Grant, who appeared at the ACT Assembly’s building quality inquiry on Wednesday. Picture: Jamila Toderas

The inquiry was ordered amid widespread community and industry concerns about the standard of building work during Canberra’s construction boom.
John Grant, a former chief executive of the Australian Building Codes Board, appeared at Wednesday’s hearing to detail his experience with what he described as “third-world practices” in construction and government enforcement of regulation in the ACT.

Mr Grant said Kingston Place owners had spent about $250,000 on expert reports and almost $400,000 on legal fees since 2014. The owners agreed to pay a levy on top of their strata fees to help fund the legal costs.

He told the hearing that money, time and considerable stress could have been saved had the developer and Access Canberra taken “prompt action” to rectify the problems when they were first identified.

Owners lodged a formal complaint with Access Canberra in August 2016, and Mr Grant said the regulator had twice stated that it intended to order the developer to fix the alleged defects,

Mr Grant said that never eventuated, meaning owners were left with “no other option” but to launch legal action. The proceedings are ongoing.

“This lack of action by the ACT government in responding to the problems and the many reviews that have taken place has merely emboldened shoddy builders, developers and tradespersons in the ACT,” Mr Grant said.

“The defects exist because those responsible for its construction and assuring compliance with the ACT government’s regulatory framework failed to deliver to the standards expected by the ACT community.”

Mr Grant said Access Canberra needed to be more aggressive in enforcing standards and punishing substandard work.

“The regulator cannot be a friend of the industry, it must be prepared to enforce,” he said.

“Access Canberra has to become a feared regulator. That doesn’t mean it has to be overzealous, but it means that shoddy builders need to know that if they are building shoddy buildings then they will be in the gun.”

Minister for Building Quality Improvement Gordon Ramsay did not respond directly to Mr Grant’s comments, but defended Access Canberra’s approach to regulation and enforcement.

The government has ramped up enforcement activity since the start of the year, including temporarily shutting down 32 building sites across Canberra.

“Each regulatory intervention by the regulator has an immediate impact on not only improving building quality through issues being rectified but also on hitting industry where it hurts – financially through mandatory rectification works and work stopping on sites,” Mr Ramsay said.

“It also has an important reputational impact.”

Morris Construction Corporation was contacted for comment.

The 100 submissions to the inquiry have laid bare the problems plaguing Canberra’s construction sector, with numerous accounts of structural defects in buildings, delays in constructions and owners being left out of pocket after companies collapsed.

The role of private certifiers has also been called into questions amid concerns about the potential for conflicts of interest.

Mr Grant, who oversaw the introduction of private certification while leading the building codes board, said certifiers should be appointed by Access Canberra, not private builders.



ACT – Building nightmares revealed, ‘Scarred by the experience’

‘Scarred by the experience’: ACT building nightmares revealed

The extent of problems in the ACT’s construction industry has been laid bare, with accounts of shoddy construction work, building delays and owners being left out of pocket by broke builders detailed in submissions to a new government inquiry.

One legal firm said it had advised 80 property owner corporations in relation to building defects since 2010.

Kerin Benson Lawyers said that ACT government inaction effectively meant that apartment owners in buildings above three storeys had “no recourse against their builders whatsoever” to fix defects.

The ACT parliamentary inquiry has received 39 submissions to its investigation into building quality in the territory.

The submissions highlight wide-ranging concerns about a lack of regulation and oversight in the ACT’s building industry.

Detailed in the submissions are numerous accounts of leaking roofs in new properties, extensive construction delays and shock repair bills imposed on owners.

In one submission, Civium Strata division manager Pascal Deschanel listed an extensive number of faults with an unnamed 45-unit apartment block, whose builder and developer were both deregistered following its construction.

Among the defects were “extensive leaking to building and basement areas, rusting to steel supporting beams” as well as “major cracking to [the] basement retaining wall”.

The property owners had “very little opportunity for recourse” because the builder and developer were deregistered, according to Mr Deschanel’s submission.

A number of submissions also raised concern about the prevalence of “phoenixing” in the ACT construction industry.

The practice, which is illegal in Australia, involves a new company being set up to continue the business of another that has been deliberately liquidated to avoid paying its debts, including tax.

In their submission, Natalie Bice and Brendan Pratt explained how their builder went into liquidation shortly after they moved into their property, leaving them to fix more than 60 defects resulting from a shoddy build.

In the meantime, the builder had transferred all of its assets to a new business, meaning the couple could not chase it for compensation.

In another anonymous submission, a property owner said he had tried repeatedly to contact his builder before discovering it no longer existed as a legal entity.

The owner said he had been “scarred by the experience” of buying the “brand-new” apartment in 2013, and has “often hated living in the ACT as a result”.

“Since the serious issue of waterproofing and roof leaks has worsened, we have been living an emotional and financial nightmare,” the submissions read.

“I would urge the committee to consider the impact on my life, the financial stress, and the prolonged emotional affliction of this negligence and lack of accountability.”

Liberal politician Jeremy Hanson is chairing the parliamentary committee investigating the building industry.  Photo: Rohan Thomson

 Liberal politician Jeremy Hanson is chairing the parliamentary committee investigating the building industry. Photo: Rohan Thomson

The ACT parliamentary committee announced in April that it would investigate the territory’s construction industry amid growing concern about the quality of building work in new developments.

Submissions to the inquiry were scheduled to close on Sunday, but have now been extended until November.

A discussion paper prepared by the committee’s chair, Liberal Jeremy Hanson, said as much as $114 million could have been spent fixing building defects in the ACT in 2016/17, based on modelling from the University of NSW.

The paper also noted that Access Canberra received 525 complaints relating to planning and construction laws in 2016/17.

In its submission to the inquiry, Kerin Benson Lawyers said that number was an “underestimate”, given complaints made by owner corporations were on behalf of hundreds of owners.

The law firm also called out a statement in the discussion paper which said “every contract for the sale of a residential building and every contract to carry out residential building work” contains a warranty, unless the work is valued at less than $12,000.

“It is only true of contracts which were entered into on or after August 2017,” the submission read.

“This effectively means that currently in the ACT, no residential buildings above three storeys have statutory warranty protection.

“This means that many larger residential owner corporations have no recourse against their builders whatsoever.”

The legal firm argued property owners should be given “more tools to address building defects”, saying it would make developers and builders far more likely to change their behaviour.

The Owners Corporation Network said in its response that property developers needed to “move away from greed and towards a more balanced approach to the needs of the community”.

An ACT Government spokeswoman said it took the issue of building quality “seriously” and was already introducing reforms targeting dodgy practice.

“Recently, this has included introducing tests for those seeking a building licence, and retesting both those who have substantiated complaints made against them,” the spokeswoman said.

But Master Builders Association of the ACT Michael Hopkins said the ACT Government continued to renew to licences of builders with a “poor building history”.

Mr Hopkins supported a crackdown on “phoenixing”, a beefed-up complaints handling unit and the introduction of trade contractor licensing.

“On a modern building site, most of the construction work is carried out by trade contractors, who, with very few exceptions, don’t have minimum training requirement and don’t require a trade licence to set up business in the ACT,” he said.


Britain to spend £200 million fixing combustible cladding

By Andrew MacAskill

London: The British government will spend £200 million ($375 million) to replace combustible cladding on the outside of high-rise buildings after some private developers refused to pay to make them safe in response to fire that killed 71 people.

Grenfell Tower, a 24-storey London social housing block, was engulfed in flames two years ago. Officials have said aluminium cladding with a plastic core contributed to the rapid spread of the blaze.

Smoke and flames rise from the Grenfell Tower building in London in 2017.
Smoke and flames rise from the Grenfell Tower building in London in 2017.CREDIT:AP

After spending months trying to persuade property companies to pay to remove the cladding with only limited success, the government has decided to step in with public funds to fix the cladding on about 170 high rise buildings.

Prime Minister Theresa May said although a number of private companies had acted, too many developers were continuing to pass on the cost of the work to people living in the buildings.