City Rail Link engineering company goes bustby RNZ
The Australian engineering firm that was set to build the Auckland City Rail Link's entire underground network has gone into administration.
At the time, City Rail Link's chief executive Sean Sweeney said the announcement marked "a major milestone for a project that will deliver significant benefits for Auckland".
The Perth-based company had gained $100 million from its shareholders in an equity-raising in late August, and later that month, had released audited financial statements to the ASX claiming to have a positive balance sheet.
In a statement to the ASX, RCR said it had appointed administrators McGrathNichol, having entered a trading halt last week.
A director of the investment management company Allan Gray, Simon Mawhinney, said the collapse was astonishing and an absolute disaster for shareholders.
"We've never seen a turnaround like this," Mr Mawhinney said.
"After the $100 million they raised, they allegedly had $140 million of net cash and a seemingly bullet-proof balance sheet.
"To go from audited financial statements released to the ASX in August, signed off by the board and their bankers, as well as the positive AGM commentary in October, defies belief.
"It's very hard to say what's happened, we have no idea. Something terrible has happened on the watch of the current board."
RCR Tomlinson has 3,400 employees, mainly in Australia.
Just two days ago, RCR listed an advertisement on LinkedIn seeking to fill a host of jobs on the City Rail Link, from senior to graduate engineers, through to health and safety managers and quantity surveyors.
The ad noted: "One of the key objectives of the CRL Project is to contribute to social sustainability across Auckland, targeting employment for Māori, Pasifika and youth along with others marginalised in the workforce."
It's not yet clear what the firm's failure will mean for the hoped-for job creation in the country's biggest transport infrastructure project.
Public Transport Users Association's national coordinator Jon Reeves said it was a bit of a shock to wake up to this news.
"It is a major concern. This is the largest transport project ever in New Zealand," he said.
"At this stage we can't tell what the impact's going to be, but there most definitely will be an impact, that's for sure."
It was too early to say whether the completion date would be compromised, but he said it most likely would be, by months but hopefully not a year.
He said if this part of the project had to go for re-tendering, it could potentially cause a delay of three to six months.
In a statement, the company said: The Australian Administrators want to clarify that while the Australian entities of RCR Tomlinson were placed in Voluntary Administration on 21 November 2018, the New Zealand companies are not in Voluntary Administration and continue to remain under the control of their boards and local management.
The City Rail Link is scheduled to open in 2024.
This article was originally published by RNZ.
In the decade since the global financial crisis, investors have enjoyed a steady upward ride and very few shocks.Read more
Building a new home but want something unique? These creative solutions prove new-builds and personality do go together.Read more
Dumplings with Wings' colourful creations take cues from all over the world.Read more
Emma Thompson may be on the bench but legal drama The Children Act is yet another example of the limits of literary adaptation.Read more
Simon Bridges has held on to the National Party leadership as a testing year ends, but how secure is his position? He says he's not worried.Read more
A look at the nuances of nouns.Read more
For 70 years, neighbouring Central Otago villages St Bathans and Becks have taken to the rugby field to battle for the Wooden Cup.Read more