SINGAPORE - Several subcontractors face heavy financial losses after the shock closure of five Build-To-Order (BTO) projects by troubled construction company Greatearth last week, The Straits Times (ST) understands.
The firms could not only miss out on the contracting fees owed them by Greatearth but they are now locked out of sites, so they cannot retrieve valuable building material such as steel components.
The HDB confirmed on Thursday (Aug 26) that Greatearth Corporation and Greatearth Construction had "run into financial difficulties" and were unable to continue work on five BTO projects under their management.
The affected projects are Sky Vista @ Bukit Batok, Senja Heights and Senja Ridges in Bukit Panjang, Marsiling Grove in Woodlands and West Coast Parkview in Clementi.
Two other public projects - Mandai Crematorium and Columbarium and Gali Batu bus depot - also face possible hold-ups.
Mr Yee Sern Wei, the director of Gin Chia, a subcontractor that specialises in tiling, told ST: "We found out about the issue only on Saturday when they started locking up the gates. There was no statement or notifications from them; we only knew what was happening because they were closing the sites.
"If they have financial problems, at least they should have informed us so subcontractors can move their materials out. Now, whatever materials like steel and cement that are left in the work sites will belong to HDB, even if they are not paid for yet."
Mr Yee said he had not been officially notified by Greatearth and found out about its financial woes only through media reports.
Greatearth subcontracted his firm to work on Senja Heights, Senja Ridges and Marsiling Grove in Woodlands.
Mr Yee estimates he is owed about $300,000 to $400,000 in labour costs, the bulk of which is through the retention clause that is standard in most construction contracts.
The retention sum is used by the developer or main contractor to remedy any defects that a subcontractor may fail to address after work is completed.
Typically, subcontractors get the money at the end of the one-year defects liability period, which starts from the date of key collection.
Mr Yee said there had been industry speculation that Greatearth was facing issues.
"There were rumours that other subcontractors were not paid on time, but in our line, we won't usually pry into other people's issues. As long as we're paid, it's OK," added Mr Yee.
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A manager at Lea Hin Co, a subcontractor in charge of installing windows at three BTO sites, told ST that he was still corresponding with Greatearth up until last week when the sites were closed.
"It's quite sudden, but we heard rumours going on for a few weeks. When a main contractor misses payment for one or two months, of course people will start talking and it spreads," said the manager, who declined to be named.
He said his company had worked on various BTO projects over the past 10 years with Greatearth.
The manager estimates that his company is owed around $800,000 for its work on the now closed projects West Coast Parkview, Sky Vista @ Bukit Batok and Marsiling Grove, including around $400,00 from Marsiling Grove alone.
The Marsiling Grove BTO is the biggest of the five affected projects, with 1,246 units spread over five blocks.
The Marsiling Grove BTO is the biggest of the five affected projects, with 1,246 units spread over five blocks. PHOTO: LIANHE ZAOBAO
The Lea Hin manager asked: "We have already installed the windows, what can we do? Take them down?"
Greatearth's office at Techpoint in Ang Mo Kio was deserted when ST visited on Friday afternoon (Aug 27), although the lights were on.
The home-grown company has worked on more than 400 projects, including Mount Elizabeth Hospital and Nanyang Technological University's Lee Kong Chian School of Medicine campuses in Boon Lay and Novena.
It has won a number of honours over the years, including the Building and Construction Authority construction excellence award for projects such as Raffles Town Club and Asia Pacific Property Awards for its architecture work at Gem Residences in Toa Payoh.
Greatearth's office was deserted when ST visited on Friday afternoon (Aug 27), although the lights were on. ST PHOTO: TIMOTHY DAVID
Accounting and Corporate Regulatory Authority searches showed RHB Bank had put charges on Greatearth Holding, the parent company of Greatearth Corporation and Greatearth Construction, in 2018.
A charge is usually taken by a lender or creditor to secure repayment of a loan.
Mr Yee of Gin Chia and the manager at Lea Hin are not optimistic about getting the money back.
Lea Hin Co's manager said: "Now we just wait and see. Maybe we'll sue them? If not, we'll just wait for their company to be liquidated and see if we can get any money back, after they pay off the first- and second-tier creditors."
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