Sydney builders and developers are urging the NSW government not to extend the ban on construction sites past the July 30 deadline to limit the devastating effect it is already having on the industry.
Capio Property Group chief executive Mark Bainey said the building and construction industry had been unfairly singled out – compared to other sectors such as hospitality, for example, where businesses are operating with restrictions – and the effect of a prolonged pause on activity could be disastrous for a lot of people.
“Our concern is that construction can’t just stop, and this ban doesn’t discriminate,” he said.
Mark Bainey, chief executive of Capio Group, said the current lockdown has already crippled their operations and a prolonged pause could tip them over the edge. Edwina Pickles
“It affects everyone in the building industry – from developers to subcontractors to labour hires.
“There’s a real financial pain that’s going to occur in the sector if the government does not lift these restrictions on July 30.”
Russ Stephens, founder of the Association of Professional Builders, said builders who were already grappling with material shortages were most at risk.
“If the ban goes on too long, we’re going to see building companies collapse for sure, because they were already on a knife’s edge due to the delays caused by material and skills shortages,” he said.
“We’ve been hearing builders tell us they have $8.5 million in contracts waiting to start but only have $85 in the bank.
“If they’re not able to work, we’re going to see these builders running out of cash.”
Mr Bainey said the lockdown had already crippled Capio Group’s operations and a prolonged pause could tip the business over the edge.
“Our profitability and our turnover will be dramatically reduced to the point where it will affect the financial viability of our company if the lockdown goes beyond July 30,” he said.
“It’s hard to work out the exact losses, but I just know that when there’s no income and expenses are piling up, it’s not a good situation for anyone to be in.”
Mr Bainey said he was worried by the state government’s willingness to impose harsher restrictions for a longer timeframe.
“There’s no guarantee that they will lift the ban on July 30, as the government has already shown that they will not hesitate to do that, which is really concerning for us,” he said.
“We’re hoping as a sector that the ban on construction sites is effectively lifted in two weeks so we can resume trading as such, because at the moment we have no income and our contractors have no income until then.”
For now, Mr Bainey is particularly concerned about his workers, who will be out of work and out of pocket for the duration of the ban.
“We’ve got three sites under construction at the moment and between the three sites, we employ 140-odd employees, contractors and subcontractors that are going to be affected by this lockdown,” he said.
“Contractors rely on weekly and monthly payments to keep progress payments flowing, but unfortunately with the current ban, builders will not be in a position to pay subcontractors.
“I think it’s reckless for the state government to impose this ban.”
Sydney builder Tom Nuzzo of ATN construction also said he was worried about running out of cash.
“We have open roofs on some of our construction jobs, so if we get heavy rains it can end up costing us a significant amount of money,” he said.
“We’ve got clients that are pushing us for moving dates and I have overheads. I have people in the office and permanent construction staff that are doing nothing and I have to pay them somehow. It’s going to be tough.”
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