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Administrators shut down York Civil, affecting hundreds of workers

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UPDATED | SA construction company York Civil will close today after administrators found the business too low on cash and impossible to sell.

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Employees and contractors were informed of the decision this morning, with Premier Steven Marshall saying it was a “very sad day for York Civil, for (its) directors, shareholders, employees, families, their subcontractors and their employees and families”.

Marshall said it wasn’t the job of Government to underwrite the risk of doing business in SA, but it would work with workers to help them “transition”.

Asked what the government would do for the direct employees of York Civil, Marshall said “we operate in a market situation where there is business failure from time to time”.

“It is actually not the responsibility of taxpayers of South Australia to underwrite all business risk in this state,” he said.

However, he said the Goverment had a “very strong program of future infrastructure projects” which would provide certainty to the market.

“There will always be market failure from time to time and that’s why we need a diversifed, strong and growing economy.”

Martin Lewis, partner at independent advisory and restructuring firm Ferrier Hodgson, said it was too early to know whether creditors would be paid.

“We expect any shortfall of employee entitlements will be met through the Fair Entitlements Guarantee Scheme – should the company be placed into liquidation at the second meeting of creditors – however it is too early to form a view on the likelihood of payment to unsecured creditors,” he said in a statement this morning.

A spokesperson for Ferrier Hodgson said the York Civil had 190 direct employees, but refused to say how many contractors it employed. Just over 130 of its employees are based in South Australia.

The company has been working on a number of high-profile infrastructure projects in South Australia including the North Terrace tram extension and the Torrens-to-Torrens upgrade on South Road.

Marshall said all projects in which York Civil was a joint partner would continue and that the Government had been assured all subcontractors would be paid what they were owed.

“This is extraordinarily important and welcome news for those people (who) are working on those projects,” he said.

Lewis said all projects in which York Civil was a joint venture partner would continue without the company.

“Arrangements have been made with the respective joint venture partners for a continuation of works on the North Terrace Tram Extension, Torrens to Torrens upgrade and Swan River Pedestrian Bridge,” he said.

“It’s our understanding that any joint venture projects York Civil is a party to will be continued by the remaining Joint Venture partners.”

The spokesperson added that the number of contractors the company had engaged would be revealed during the creditors’ process.

A creditors’ meeting is due to be held this Thursday.

The Premier said York Civil’s demise had “nothing to do with” the previous Government or his own, which had met their financial obligations to the company.

“The timeframe that the administrator had to make this decision was extraordinarily short,” he said. “It was only last week that we were hearing that an administrator had been appointed…

“Now what we need to do as a Government is to work as diligently as we can to minimise the damage to anybody else in this state.”

Opposition Transport and Infrastructure spokesperson Tom Koutsantonis said the Government should offer retrenched employees a support package.

“Without any consultation or discussions with workers, it took Premier Steven Marshall less than an hour to rule out an assistance package for impacted South Australians,” said Koutsantonis in a statement.

“I would like to see the Premier face up to these workers and tell them why they are not deserving of support.

“The lack of empathy this Government has for South Australians who have lost their jobs is just disgraceful.”

He said the package should include career advice and assistance, financial advice services and referrals to health and wellbeing services.

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