Construction Company Dawnus 'in Administration'

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Media caption"It's a very worrying time for workers," says First Minister Mark Drakeford

Construction company Dawnus has gone into administration, according to subcontractors.

People who work for the Swansea-based firm were called to a meeting on Thursday morning.

But they were sent home afterwards, and could be seen removing tools from the site.

It comes after work on the £12m Kingsway redevelopment in Swansea and a road project in Manchester were both halted.

Three school building projects in Powys could also be delayed, including one which is scheduled for completion in September.

Dawnus - which runs construction projects across the UK and overseas - referred the BBC to accounting firm Grant Thornton when asked for comment.

Image caption Workers leaving a meeting at Dawnus

People leaving the Swansea meeting said they had been told the firm had gone into administration.

The boss of one sub-contracting firm, who did not want to be named, said: "We got wind that there were problems a few weeks ago and decided to remove some equipment on site as a precautionary measure.

"We are still out of pocket - but thankfully not a significant amount.

"I think we might have got off lightly compared with what I've heard about other firms."

On Tuesday, diggers were abandoned on the £15m Manchester-Salford Inner Relief Route improvement scheme, which is upgrading six major junctions along Regent Road, amid claims workers had not been paid by Dawnus.

The following day, workers in Swansea were sent home by their bosses.

Image copyright Jon Reid
Image caption An abandoned digger blocked traffic heading into Manchester on Chester Road

A spokesperson for the Manchester-Salford Inner Relief Road scheme, which is being carried out jointly by Manchester and Salford city councils, said it was seeking "urgent clarification" about the status of Dawnus.

"We are currently pursuing all other options to ensure the project can continue as quickly as possible," they added.

Swansea council said work on the Kingsway site had come to a sudden stop on Wednesday and it was taking control of the site.

"We have already taken a number of steps and we are considering our options," a spokesman added.

Image caption Swansea's Kingsway is undergoing a £12m redevelopment

The council said it was working through issues relating to appointing a new contractor "as a matter of urgency" and was in discussion with the supply chain.

The council said Dawnus had also recently begun work as the main contractor for its new pupil referral unit at Cockett, and it was also taking control of that site.

"We are determined that these two important schemes are completed as planned…we are taking all the necessary steps to resolve these issues as quickly as possible."

Dawnus has its headquarters in Swansea but runs construction projects across the UK and overseas.

The most recent company accounts show the company had a turnover of £170m in 2017, but it also posted a pre-tax loss of £1.35m.

Last September, the company said it employed 700 people and was optimistic about the future.

Among its past projects across the UK are the Great Western Air Ambulance Charity and National Police Air Service Air Operations in South Gloucestershire, a creative industries centre at Kingston College in London, and South Wokingham Secondary School in Berkshire.

Dawnus has previously operated in west Africa, and worked on projects during the Ebola crisis.

In August, during a UK trade mission to South Africa attended by Prime Minister Theresa May, Dawnus was unveiled as part of a consortium targeting oversea aid contracts.

The company told BBC Wales in September that they felt optimistic about life after Brexit because of the opportunities for overseas work.

In Powys, Dawnus has contracts to build three new schools - two new primary schools in Welshpool, and a replacement for the county's first all-through school Ysgol Bro Hyddgen in Machynlleth.

One of the primary schools is scheduled for completion in September while the other two projects have not yet started work.

Image caption Construction of a new primary school next in Welshpool, Powys, is under way

"We will be working to mitigate any potential issues which arise," said Councillor Myfanwy Alexander, cabinet member for learning and Welsh language.

Rhondda Cynon Taf council said Dawnus had the contract for the £1.5m Pontrhondda Bridge replacement in Llwynypia, due for completion this summer.

Image caption There were no workers on the Pontrhondda bridge on Thursday

Wales' First Minister Mark Drakeford described Dawnus as a "very important company".

"It's obviously a worrying time for all those people who work for the company, but also there are projects across Wales the company is involved in," he said.

The Welsh Government would do whatever it could to assist those affected, he added.

David Price, finance editor of Construction News, said there had been rumours Dawnus was facing trouble after reports of losses.

"In 2014-2015 they made significant losses of around £13m, connected to work in Africa, and they have struggled to recover from that since then," he said.

Analysis by BBC Wales business correspondent Brian Meechan

Dawnus has grown from a small Welsh firm to a big name in the construction industry.

It's one of just over 50 "anchor companies" identified by the Welsh Government as having global reach and a headquarters in Wales.

Dawnus was seen as a responsible employer with a good reputation for delivery.

Welsh construction firm Cuddy also went into administration recently, but the impact of the collapse of Dawnus has caused a greater shock throughout the industry.

One of the issues with the Welsh economy is the lack of small firms that steadily grow to become large companies.

And as Brexit looms companies are being encouraged to look to new markets, especially outside of Europe.

Dawnus was a good example of a company that did both these things.

However it appears the firm has struggled to recover from past problems on some of its projects in Africa.

Some in the industry are concerned other small businesses may now see it as a warning about expansion, rather than the success story it once was.

Construction is incredibly competitive and margins are tight, and something going wrong on just one or two projects can cause enormous damage to a business.

On top of this budgets are being squeezed in the public sector and the private sector appears to be holding back on some investment due to the current uncertainty around Brexit.

Projects like the M4 and Wylfa, which Dawnus would certainly have hoped to work on, are on hold.

Whenever one of these large companies goes into administration the concern immediately turns to the suppliers, contractors and workers who will be affected by it.

It may take some time before we know what the full impact will be.