Bathla suspensions point to 'larger storm' coming in construction industry

Bathla Group, a property developer in voluntary administration, has suspended two-thirds of its workforce, leaving dozens of customers uncertain about the future of their projects. Out of the 45 active projects, it remains unclear how many will continue under the short-term funding lifeline. The administrator, Teneo, confirmed construction would proceed for projects commissioned by Bathla's five lenders, but single mum Casey's dream home is stuck at the gyprock stage after finding out about the company's voluntary administration through a social media post.

Communication from Bathla has been deemed minimal, with Casey feeling overwhelmed and disappointed after putting off renting. Approximately 213 of Bathla's 350 employees have already been stood down, and administrators are in search of additional funding commitments to sustain the group beyond the next fortnight. According to Chris Baskerville, a partner at insolvency firm Jirsch Sutherland, the company may be scrambling to determine which projects can be completed if more funding is secured, as anything 80% complete or above will be assessed for commercial viability.

Baskerville expressed concern that Bathla may not be an isolated case, warning that others could potentially follow suit due to the broader economic challenges, including a decline in new build applications, mortgage applications, and increasing credit costs. Nine out of ten Australians believe they should have access to a register of independently rated builders, with Equifax Australia creating the Independent Construction Industry Rating Tool (iCIRT) to help customers identify trustworthy builders.

However, many companies, including Bathla, do not have an iCIRT rating, leaving the responsibility of verifying a company's ability to deliver a project on the customer.