Payments uncertain as ACT construction firm SMI enters administration

The company, whose financial strife leaves several government projects unfinished, went into receivership by accounting firm RSM Australia Partners and left subcontractors uncertain they would be paid for their work and materials.

One subcontractor, who did not want to be identified, said sums between $10,000 and $80,000 were owed.

The ACT government confirmed on Wednesday it had five contracts with SMI, including two Canberra Institute of Technology upgrade programs, two projects with the Education Directorate, and a fifth with the Canberra Hospital involving LED replacements.

Work had been generally suspended, although minor works may proceed while the ACT government meets with RSM to determine the impact on projects.

Most of the works were largely complete, a government spokesman said.

Master Builders ACT deputy executive director Michael Hopkins said subcontractors had called the peak industry body on Wednesday, seeking advice.

It was awaiting RSM to call an initial creditors meeting, expected within two weeks. The total money owed to subcontractors and suppliers remained unknown as administrators had to examine SMI's finances.

"Whenever an event like this occurs it always has a devastating impact on subcontractors and suppliers," he said.

"Many will be owed thousands of dollars.

"We'll be doing everything we can to protect subbies and suppliers impacted by this."

RSM would not comment on the matter, although a brief statement on its website directed queries to the company and said it took administration on Tuesday.

Administrators must call a first creditors meeting within eight business days, according to the Australian Securities and Investments Commission.

Subcontractors, who did not want to be named, expressed fears payments wouldn't be made after hearing SMI went into administration.

One said on Tuesday he was "panicking".

"At this moment, no one will give you an answer because it's all up in the air.

"The more people I talk to, the more unclear it is. Everything is really in rumour mode, or guessing."

He was concerned the government would pay the administrator, which could divide owed money across unpaid parties outside the ACT and prevent subcontractors from receiving their full payment. Paying subcontractors directly would ensure they could receive what they were owed, he said.

Another subcontractor said there was no guarantee they would receive the money.

"We've been pretty much left in the dark."

The ACT government said it held insurance for its projects, but this did not cover companies' debts to subcontractors.

"Before the government pays a contractor it requires assurance from the contractor that all due debts have been paid."

SMI, which concentrated on shop and office fit outs and other commercial work, had offices in the ACT and Victoria, and has carried out construction work at the Army headquarters, CSIRO, National Museum of Australia and University of Canberra.

A commercial office fit out at Etihad Airways saw its work extend to Sydney.