MAJOR Bunbury-based construction company Devaugh Pty Ltd has called in the administrators, owing $12.6 million to about 500 creditors.
The decision puts a cloud over the $13 million contract the company had for the major construction component of the State Government’s $20 million court complex in Albany.
Some of its financial woes were eased on the day the administrators were appointed with the sale of Devaugh Refractories to Adel-aide firm IVS. It is understood that sale reaped more than $1 million.
On December 31 Ferrier Hodgson partner Martin Jones and his colleague, Darren Webster, were ap-pointed administrators to the reg-ional building group that employs about 200 workers.
Mr Jones told WA Business News the announcement of Ferrier Hod-gson’s appointment had to be timed to avoid upsetting the settlement of that sale.
He said he had not yet received sufficient information to make any judgements about Devaugh’s ability to trade out of its financial difficulties.
“We’ve met with Alcoa and Worsley, two of Devaugh’s major clients, regarding the ongoing contracts the company has with them,” Mr Jones said.
“They’ve taken the line that as long as their interests align with Devaugh’s interests they will continue to support it.”
A spokesman for the Department of Housing and Works, the ag-ency that let the court complex project, said the department would wait to see whether the administrators believed Devaugh could trade out of its difficulties.
He said the court complex was about 50 per cent complete.
The court construction contract was the largest job the department let in 2004.
The seeds of Devaugh’s problems were sowed with two of its major projects – the Bunbury Health Campus and the Kalgo-orlie Miners’ Hall of Fame.
On the Bunbury Health Campus job Devaugh received a court order to pay plumbing contractor Lamac $800,000.
That order was later overturned on appeal, however Lamac was unable to pay the money back to Devaugh.
On the Kalgoorlie project the company found itself facing a number of unforeseen issues that led to cost overruns.
Devaugh director Mervyn Waugh told WA Business News, prior to the announcement of the app-ointment of administrators, that the company’s latest business plan had been “a bit ordinary”.
“We started getting away from our core business,” he said.
Mr Waugh said the company’s woes had arisen from the Mining Hall of Fame and Bunbury Health Campus problems.
One construction industry source said Devaugh had enjoyed a good reputation in the regional areas it operated because it tried to employ local subcontractors wherever possible.
Other companies linked to Dev-augh are Devaugh Construction, Devaugh Fabrication and Dev-augh Cabinet Making.