South Newcastle Beach skate park hit in Lloyd Group administration

City of Newcastle said it was waiting for formal notification from the company Lloyd Group or the appointed administrators about the situation.

"We will then seek necessary advice to confirm any impact on the South Newcastle project and how we will ensure the timely completion of the project," a City of Newcastle spokesperson said.

The company went into administration on Friday. Deloitte Turnaround & Restructuring have been appointed as voluntary administrators.

Deloitte restructuring partner and voluntary administrator Sam Marsden said they would urgently assess the business's project-by-project status.

"We do appreciate that this news will be unsettling and potentially disruptive for employees and project stakeholders, contractors and suppliers," Mr Marsden said.

"In these early days, we will be undertaking an urgent assessment of the business's financial position and project-by-project status, and immediately commence communication with project principals and stakeholders."

The Bathers Way skate park project was due for completion last year, but the timeline and cost have blown out significantly after storms and big swells smashed the site numerous times.

The Herald reported in August 2022 the contract value was $4.5 million more than when the project was announced.

That contract, worth $15.58 million, remained on Newcastle council's contracts register on March 31, 2023 as the most current agreement.

Council said replacing the South Newcastle seawall and restoring stone arches had resulted in an increase to the contract cost.

The site was opened temporarily during Supercars as it provided the only public access point to Newcastle and Nobbys beaches during the event.

Lloyd Group specialises in design and construction of building projects for state and local government, primarily in Victoria and NSW.

The company's collapse will affect 59 projects under construction - 29 in Victoria and 30 in NSW. The business has about 200 employees.

Mr Marsden said the sector had faced increasingly challenging circumstances in recent months that had eroded project margins.

It comes as 1500 homes are under threat after Porter Davis was also placed into administration.

Russ Stephens from the Association of Professional Builders said the situation was sad but expected.

"This all goes back to the COVID boom in construction. We predicted this exact scenario was going to play out," he said.

"The large building companies signed three, four and even five times the amount of contracts they would normally sign without having the resources to to deliver."

Mr Stephens said there needed to be tighter controls around financial reporting.

"At the moment, it's way too easy to submit reports that allow these building companies to not only continue trading, but allow them to sign more contracts," he said.

Federal opposition housing spokesman Michael Sukkar said Labor had been warned about the issues in the industry but refused to help.

"The coalition's support for the industry through COVID is now being jeopardised by Labor's neglect," he said.

- with AAP

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