Workers pulled from five big solar projects as RCR collapses

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Update: Workers pulled from five solar farms being built by RCR-Tomlinson as the engineering firm is placed in administration.

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Contractors have pulled workers off the sites of at least five major solar projects in Queensland, as the woes of big engineering group RCR Tomlinson deepened and the company was placed in administration on Thursday.

Union officials told RenewEconomy on Tuesday that work at the five Queensland solar farms being built by RCR Tomlinson had effectively come to a halt after workers were pulled from the site overnight.

Peter Ong from the Electrical Trades Union said workers from labor hire firms Inselec, Mass Recruitment and WorkPac were pulled from the Haughton, Clermont, Emerald, Collinsville and Darling Downs solar projects.

Most of these projects are already producing, but not yet complete. It is not clear whether all have finished installation or not.

The labor hire firms – two of which told the Australian Financial Review that they were owed significant amounts of money – had been advised by their insurers to remove the workers.

“We tried to get ahead of it last week,” said Ong, who last week threatened to pull workers from the solar farms if the project developers and owners did not provide guarantees. “The writing is on the wall.”

RCR Tomlinson sought a trading halt early last week, then deepened the issue by suspending its shares from trade, and on Tuesday sought another week’s suspension to try to sort out its problems and add funding.

It failed, and on Thursday announced it had gone into administration, appointing McGrathNicol as administrators.

Those issues have been compounded by class action on behalf of investors launched by legal firm Quinn Emanuel Urquhart & Sullivan over the dramatic fall in the company’s share price.

RCR Tomlinson announced a major write-down of $57 million from the $300 million contract for the Hayman and Daydream solar projects, a result it blamed on unexpected costs. It then made a $100 million capital raising. Its shares slumped and now the company has flagged more issues.

It is not clear whether the latest suspension relates to more write-downs from solar projects that are unable to meet their budgeted costs, or because of a slowdown in its other industry sectors.

Pacific Hydro issued a statement saying that it has “secured” the Haughton solar farm construction site, as it awaits developments.

“Our project is an important investment in North Queensland. We will take all of the steps necessary for construction to continue, while maintaining the safety and security of the site,” Pacific Hydro Interim CEO Rachel Watson said in a statement.

Stage 1 of the Haughton solar project is a large-scale 100MWac solar project located in the Burdekin region of Queensland, 60km south of Townsville. The project is “well advanced” but not complete, but the company would not comment on whether there would be hit by delays by the latest development.

Solar projects have been hit by a range of issues, including delays in approvals from networks and the market operator, and tough new connection requirements.

This has resulted in other damages claims, such as the $22 million one made by Neoen against the builder of some of its NSW solar farms.

Infigen Energy this week warned that its Cherry Creek wind farm and many other projects had been delayed by new connection standards, the requirement for multiple appraisals, and the lack of expertise at consulting firms to help companies through the process.

Quinn Emanuel said it had filed proceedings against RCR Tomlinson in the Supreme Court of New South Wales on November 16. The action is being financed by Burford Capital.

Damian Scattini, partner at Quinn Emanuel, said in a statement: “It’s unlikely that the recent alarming disclosures by the company could have come as a surprise to Management – if they did, that’s worse. RCR shareholders have seen a catastrophic decline in their share value.”

Projects already completed by RCR include the Sun Metals solar farm, along with the Swan Hill solar farm in Victoria, and the Greenough River solar farm in W.A. Other projects include Longreach, Oakey, and Wemen, where workers were pulled from the job last month – but it is not clear whether any or all of those are complete.

 

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