BER builder calls in administrators

A Western Australian building company with significant work from the federal government's Building the Education Revolution program has run into financial trouble, with Midland Constructions Pty Ltd calling in administrators last night.

The firm's directors Richard and David Affleck called in WA Insolvency Solutions last night, predominantly as a result of financial issues relating to work done on schools as part of the federal government's BER stimulus program.

WAIS director Chris Williamson said the Bassendean-based firm was doing extensive work across both the private and public elements of the BER program and had been impacted by payments withheld due to disputes over cost and construction delays.

WA Business News is aware of at least one site that has been closed as a result of the voluntary administration but Mr Williamson the intention was to keep the business operating.

"We are trying to keep the business going as much as normal at the moment," he said.

The problems at Midland Constructions, which is also known in the industry as Midcon, are not the first linked to the BER. Last week, the collapse of Loxam Developments took some in the sector by surprise.

Loxam was involved in a $2.5 million BER project at Perth's Presbyterian Ladies College.

The BER has been very controversial in the eastern states due to the huge perceived waste on state school projects. However, the WA government's BER program has generally been well received and issues relating the state school works appeared to have been limited to delays in the fitting of air conditioning in new classrooms.

The Australian Government is spending $666 million on maintenance and new capital works at WA's 779 public schools as part of its national $14.7 billion BER program. That funding was managed by the Building Management and Works, which is part of WA Department of Treasury and Finance.

Another significant sum was to fund private school funding, managed directly by the federal government.