Snowy 2.0 confirmed as failed contractor’s biggest creditor, hundreds wait for funds

Collapsed engineering firm Clough’s largest creditor by some margin is the Snowy 2.0 pumped hydro joint venture, which has $88.7 million in bills owing, according to documents filed with the corporate regulator over the weekend.

The company’s total debts come to $248 million.

The second largest debt of $20.4 million is owed on a commercial lease, and Mitsui E&P subsidiary AWE Perth is owed $12.6 million for work it did on the Western Australia Waitsia gas project.

Clough’s employees, considered priority creditors under Australian law, are owed $15.6 million.

Redacted from the filings were the amount of money Clough companies are owed and the value of assets owned by the company.

If initial assets sales are anything to go by, administrators may struggle to clear the company’s debts after it was put into voluntary administration in late December, in an attempt to avoid liquidation.

In December the main contractor for Snowy 2.0, Italy-based WeBuild, agreed to buy Clough’s share of the Snowy contract as well as other assets such as Waitsia for a fire sale price of $17.6 million.

It had originally agreed to pay  $500,000 originally  to Clough’s parent company, the South Africa-based Murray & Roberts, in November, but that deal included a sizeable inter-company loan.

Webuild and Clough won the 2018 tender to build Snowy 2.0 in for a fixed $5.1 billion.

But the duo have struggled with a budget blow out of up to $5.9 billion, which they admitted during Senate Estimates in November. Claims the project has also eaten another $2.2 billion in as-yet unreported costs may lift this figure considerably higher.

The creditor news comes just after energy and climate minister Chris Bowen named Dennis Barnes, the former boss of New Zealand utility Contact Energy and a long time executive of Origin Energy, as the new Snowy 2.0 CEO.

Former CEO Paul Broad resigned last year amidst Bowen’s anger over the previous federal government covering up Snowy 2.0 delays and cost over-runs, and the joint venture’s own efforts to prevent information getting out, including not telling the energy market operator the project would be delayed.