Home > Opportunities for contractor growth on the back of Forge collapse

Opportunities for contractor growth on the back of Forge collapse

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Mining contractors say the collapse of Forge Group presents growth opportunities for other companies in the sector, with many vying to take over $1.5 billion in dumped contracts.

The comments come after the debt owed by Forge, which went into administration last week, crept to $700 million.

According to West Business, Engineering companies including Monadelphous and RCR Tomlinson have expressed interest in some of the multi-million contacts Forge lost as part of its collapse.

Monadelphous managing director Rob Velletri was cautiously optimistic about the opportunities available to other businesses.

"There are opportunities out there. Whether they translate to real work, only time will tell,” Velletri said.

"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.”

While RCR managing director Paul Dalgleish said his firm was looking at unfinished power station contracts left by Forge, the same which ultimately led to the company's demise.

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

However Dalgleish said finding replacement contractors for the projects would take time because of their size and the number of shareholders involved.

He said clients should use contractors with a proven track record of delivering on projects instead of adopting a system of open bidding which encourages undercutting.

Forge has lost all but one of $1.5 billion worth of contracts since ANZ and other financiers withdrew support for the company last week.

The company has culled its workforce by more than 1300 since the announcement.

Receivers KordaMentha and administrators Ferrier Hodgson have taken control of the company.

Administrators will host the first meeting for Forge creditors in Perth on Friday.

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