Over A$13b of projects in limbo as Australian contractor Clough falls
MORE than A$13 billion (S$11.9 billion) worth of gas, power, rail and mining projects face delays, following the collapse of Australian engineering firm Clough on Monday (Dec 6).
The projects span Australia, Mongolia and Papua New Guinea.
One of the projects that could be affected is the expansion of Oyu Tolgoi, one of the world’s largest copper mines. The Mongolian site is run by mining group Rio Tinto.
Other projects in limbo include major power plant and transmission projects in Australia from 2023. The projects are essential to maintaining a stable grid in the country.
Clough was placed into voluntary administration by its South African parent, Murray & Roberts Holdings, after a deal to sell the business to Italian construction giant Webuild fell through.
It had a global workforce of 2,500.
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Deloitte, appointed as administrator, said it would assess the Perth-based company’s financial position over the next two to three days. It would then begin an accelerated sale and recapitalisation process, aiming to get projects back on track.
It said the goal is to source “immediate interim funding, to be able to continue work on as many projects as possible as quickly as possible”.
Webuild and Clough were partners on an A$5 billion rail project in Australia’s Queensland state, and the expansion of Australia’s biggest hydropower scheme, Snowy 2.0. The project, also worth A$5 billion, was already facing a delay of nearly two years into 2028.
Government-owned Snowy Hydro said it was working to ensure Clough’s workers involved in the Snowy 2.0 project stayed on the project. A spokesperson for Energy Minister Chris Bowen said he had been told that no blue-collar workers on site were employed through Clough.
A Snowy Hydro spokesperson said: “We are working closely with the joint venture to ensure construction on the project progresses smoothly.”
Clough was also handling construction of the A$768 million Waitsia Stage 2 gas project, owned by a unit of Japan’s Mitsui & Co and Australia’s Beach Energy .
The Waitsia Stage 2 project was due to start producing gas for export through the North West Shelf liquefied natural gas plant in late 2023.
Mitsui E&P Australia said it would work with all its partners to ensure the project proceeded.
“Given that an administrator has only just been appointed for Clough, it would be premature to speculate on the precise impacts for the Waitsia Gas Project Stage 2,” it added.
Clough was also the contractor on a key project needed to shore up Australia’s power supply, the 320-megawatt Tallawarra B gas-fired power station. The station is owned by EnergyAustralia, a unit of Hong Kong’s CLP Holdings.
An EnergyAustralia spokesperson said the company would work with stakeholders, including General Electric and the administrators, to enable construction to continue so it could “play its part in ensuring the lights stay on in summer 2023/24“.
Another major project involving Clough was a 900 km power transmission line, EnergyConnect, owned by TransGrid.
TransGrid said it would work with Clough’s partner Elecnor to deliver the A$2.3 billion project, which would be essential for hooking new solar and wind farms to the grid. It expected to meet the completion deadline of late 2024.
Rio Tinto had no immediate comment on the impact of Clough’s collapse. REUTERS
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