Although Dawnus turned over less than £200m, compared to Carillion’s £5bn, the damage to the region could be comparable, the Specialist Engineering Contractors’ (SEC) Group Wales/Cymru has warned.
News that the Dawnus Group is going into administration will impact upon large numbers of smaller firms in Wales, SEC said, as in recent years Dawnus had become the lead contractor for many infrastructure and building projects in Wales, particularly in the public sector.
Grant Thornton is expected to be appointed as administrator this morning (15th March 2019), according to reports.
Catharine Griffiths-Williams, national executive officer of SEC Group Wales/Cymru, said: “Nearly all the work carried out by Dawnus was outsourced to SMEs which will now bear the brunt of the losses from the insolvency. Again this highlights the financial fragility of the large construction firms and the consequent risks to their sub-contractors which could now lose millions of pounds. The impact on the Welsh economy could be very damaging. There is also a human cost involved. I’m very concerned for the people in Wales who worked for Dawnus and its subcontractors whose jobs will now be at stake.”
SEC said the the demise of Dawnus was ‘ a wake-up call to all public bodies in Wales to implement the Welsh government’s policy on project bank accounts’ to protect payments to subcontractors in construction supply chains.
Catherine Griffiths-Williams added that she was also concerned that many supply chain firms will lose their retention monies that would have been held back by Dawnus, ostensibly as security in case of non-compliant work. “These retention monies belong to the firms from whom they have been withheld. Again these monies must be protected and to that end we will be inviting the Welsh government to legislate to provide such protection.”