A major Western Australia engineering company that the NT Government selected as a joint-venture partner to build the long-delayed, taxpayer-funded $515 million Darwin ship lift project, has gone into administration raising questions about the future of the major project.

Clough Group and its subsidiaries were placed into voluntary administration after a proposed short-term loan facility of $30 million from Webuild to Clough – which was to be used as working capital and avoid entering voluntary administration – fell through.

The failure of the interim loan to meet the prescribed date for implementation prompted Clough’s board to place the company and its affiliates under voluntary administration immediately.

Deloitte Australia corporate rescue team led by Sal Algeri, Jason Tracy, Glen Kanevsky and David Orr were appointed administrators for Clough.

Clough, together with the BMD Group, were selected by the Fyles Government as contractors of the Darwin ship lift project—which has never seen an economic assessment publicly produced and that will be operated privately by Paspaley Group.

Clough was also contracted to expand the Federal Government’s Snowy Hydro 2.0 project.

The administrators said interim funding would be sought immediately.

“With our appointment, over the next two to three days, we will carry out an urgent assessment of the financial position of the Clough Group companies, with a view to sourcing immediate interim funding to be able to continue work on as many projects as possible as quickly as possible,” Mr Algeri said.

“An accelerated sale and recapitalisation process will also commence.”

The NT Government said it was “closely monitoring the situation” involving Clough’s collapse.

The ship lift project’s costs recently increased by $115 million more than earlier reported to $515 million after the government announced the selection of the Clough-BMD group joint venture as the contractor for the major project and following years of delays.

The funding will see Territory taxpayers shell out more than $200 million, with the other $300 million in the form of a concessional loan from the federal Northern Australian Infrastructure Facility (NAIF).

Paspaley is not contributing any money to the project.

In July, Chief Minister Natasha Fyles announced the Clough-BMD Joint Venture as the winning contractor, adding that it was “symbolic and historic”, and that the ship lift will bring millions into the Territory economy annually, as well as generate and maintain hundreds of local jobs in the maritime support sector.

“As a key piece of enabling infrastructure, the ship lift will establish Darwin as a key maritime maintenance hub and create the opportunity to grow a thriving marine service and supply sector in Darwin to create jobs and grow businesses and is key to establishing a marine services precinct at East Arm,” she said.

The government has said the ship lift would be capable of servicing large vessels of up to 5,000 tonnes and will “be used for multiple industries including offshore petroleum, fishing, pearling and Defence and Border Force”, but neither the ADF nor Border Force has committed to using the facility.

In 2018, the Auditor General previously found out that the earlier $100 million government pledge for the project was not based on any economic modelling and that the government did not complete a cost-benefit analysis.

An early pre-feasibility report considering the direct economic benefits of what was then proposed as a larger “marine maintenance precinct” found it would return just 65 cents for every dollar spent, but the rest of the project has since been scrapped and will now only be a ship lift facility, which the government has not been able to provide any modelling that shows it will be feasible.

The Darwin ship lift was expected to be operational by the end of 2024, but it was unclear what impact the collapse of Clough will have on that timeframe.