Welsh construction firm goes into administration

Councils have been forced to put contingency plans in place following the collapse of the Welsh construction firm Dawnus.

The Swansea-based building company, which has 700 employees, went into administration last week and has already been dubbed by some as the ‘Welsh Carillion’.

The firm involved in a number of regeneration, highways and school building projects up and down the country.

It was announced at the end of last week that Grant Thornton has been appointed as administrators for Dawnus.

‘The Dawnus Group has struggled with a wide variety of challenges and despite significant efforts to turn the business around, unfortunately, it has not been possible to rescue the group,’ said Grant Thornton’s restructuring partner, Alistair Wardell.

‘As a consequence, the future cash flows has meant that the business was not in a position to continue to operate, including completing existing work in progress.’

Another construction giant, Carillion collapsed in January 2018 with debts of more than £1.5bn.

One of the projects that Dawnus was the £12m Kingsway redevelopment scheme in Swansea town centre.

In a statement, Swansea City Council said construction work will continue as the local authority seeks to bring on board a new contractor within weeks.

‘We have council workers back on site today and they will be busy making the Kingsway as user-friendly as possible – removing some barriers and protective fencing,’ said council leader, Cllr Rob Stewart.

‘Importantly, we also now have the opportunity to address a number of defects which have previously been raised with Dawnus but were not dealt with while they were on site. Progress will continue.’

Dawnus was also the main contractor on Wokingham Borough Council’s Peach Place regeneration scheme in the town centre.

‘Given the risks inherent in all building contracts of this type the council has rigorous policies in place to handle situations like this and has already moved forward with taking control of the site,’ said Wokingham’s executive member for regeneration, Cllr Philip Mirfin.

‘It is premature for the council to comment too much at this stage but, whilst the project is well advanced, a review of outstanding works will be carried out and a new contractor is in the process of being appointed.’

‘Contingency plans are already in place and works will be prioritised to allow retail tenants to open for business as soon as possible. It is hoped that some can complete their fit out and open to the public by the end of March or April as planned.’

Speaking on behalf of the Specialist Engineering Contractors’ (SEC) Group Wales/Cymru, Catharine Griffiths-Williams, said she was very concerned over the extent of the knock-on effect on the engineering firms in her sector, most of which are small and medium-sized businesses.

‘Again this highlights the financial fragility of the large construction firms and the consequent risks to their sub-contractors which could now lose millions of pounds. The impact on the Welsh economy could be very damaging,’ said Ms Griffiths-Williams.

‘There is also a human cost involved. I’m very concerned for the people in Wales who worked for Dawnus and its sub-contractors whose jobs will now be at stake.’