Contractors pounce on Forge jobs
Contractors pounce on Forge jobs

Contractors are circling projects once serviced by Forge Group, conceding its $700 million collapse last week has created opportunities for competitors.

Engineering companies Monadelphous and RCR Tomlinson expressed interest in some of the $1 billion in contracts lost by Forge when receivers and administrators took over.

"The reality is that there will be more work available and it provides an opportunity for us in the current market and, I guess, in the competitive landscape," Monadelphous managing director Rob Velletri said. "There are opportunities out there. Whether they translate to real work, only time will tell."

Mr Velletri said "like everybody else" the company had looked at Forge when broker Euroz was providing corporate information to interested parties in a bid to attract equity to the embattled contractor.

Many of the contractors who examined Forge's books were thought to be on a scavenging exercise rather than considering an investment.

RCR managing director Paul Dalgleish said his company was targeting power station projects left unfinished in the Forge collapse.

"We're obviously talking to groups of people about a lot of those contracts," Dr Dalgleish said.

"We're one of the very few companies in this country who's successfully built lots of closed-cycle power systems. I think we're in good positions to do that work."

But Dr Dalgleish said engaging replacement contractors for the projects could take time because of the number of stakeholders involved. He said the Forge collapse had demonstrated the high-risk nature of the industry. He said it would be preferable if clients returned to the scrutiny of using prequalified contractors instead of the open-bid system which encouraged low-ball pricing.

Macmahon Holdings, which had a near-death experience in 2012 over construction losses, announced a return to profit yesterday.

"The new dedicated mining strategy is working well," managing director Ross Carroll said. "We have funding headroom to manage growth as and when market conditions improve."

The West Australian

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