Hawkins' jail project wound up

Photo / Thinkstock

One of New Zealand's largest builders, Hawkins Construction, has wound up the company behind a disastrous Australian business venture.

David McConnell, Hawkins' interim chief executive, said Hawkins Ararat, the company formed to work on the $517 million Victorian project to build extensions to the Ararat Prison near Melbourne , had been put into voluntary administration.

At the end of last month, most of the mainly Australian staff working for the New Zealand builder were laid off and now work has ground to a halt.

This week, McConnell said Hawkins was keen to remain involved with the project and it was encouraged by continuing discussions between the state, the receivers of the AEGIS Correctional Partnership and the project's funders on a financial solution.

He said he was extremely disappointed that the discussions had become protracted.

"This is a complex situation outside Hawkins' control and the company has now been forced to take steps to avoid incurring further costs and liabilities by placing Hawkins Ararat Pty Ltd - a special purpose vehicle established specifically for the Ararat project - into voluntary administration.

"The directors have made a responsible, commercial decision. Voluntary administration effectively allows us to remain in a holding position on the project, without incurring further costs and liabilities, until the state and AEGIS receivers manage to resolve a funding solution which will allow the project to continue," he said. "We believe there is a role for Hawkins on Ararat over the long term but, particularly following the receivership of our client AEGIS, the project's current commercial arrangements have become unworkable."

He did not believe the development would have any material effect on the company's operations in New Zealand, or on its other projects.