Economy Minister: 455 Welsh suppliers affected by Dawnus collapse

(Title Image: Construction Manager Magazine)

There were two topical questions this afternoon on the collapse of Dawnus Construction and the recent report into the Swansea Bay City Deal. As the latter was partially answered at economy questions, I’ll focus only on Dawnus (pronounced dow-niss, meaning “talented/gifted” in Welsh).

As you probably already know, the Swansea-based company went into administration last week, threatening hundreds of jobs and bringing a number of civil engineering projects in Wales and England to a halt. It’s been described in some quarters as “The Welsh Carillion“.

Devastating impact on the local economy

Joyce Watson AM (Lab, Mid & West Wales) asked for a statement from the Welsh Government, saying the impact of this news will go wider than just Dawnus.

“….when a large company like Dawnus does go into administration, it puts smaller, local businesses at risk, potentially having a devastating impact on those local economies. We know that they directly employ 700 people, and that’s a large number in and of itself, but there is a much larger potential number within the locality, as I’ve just described. These are not just numbers of people, but real families being affected by this collapse.”
– Joyce Watson AM

She listed a number of projects affected by the news, including four school projects and a new road in Fishguard.

Economy Minister, Ken Skates (Lab, Clwyd South) told AMs the Welsh government stood ready to help employees. New placements would be found for as many apprentices working for Dawnus as possible. His focus was now on ensuring projects being undertaken by Dawnus went ahead with minimal disruption, but he made “no apology” for providing the company with support in previous years.

Suzy Davies AM (Con, South Wales West) asked about a £3.5million Welsh Government loan to the company, which has £1.5million outstanding. As this is administration and not a liquidation it could be some time before the government gets this money back. She wanted an idea of how much would be available to other creditors once the government and banks had been paid. Was funding for the Kingsway regeneration in Swansea affected?

The Minister said funding relating to the Kingsway project wasn’t believed to be affected. The Welsh Government loan was matched by a further £3.5million from Dawnus’ bank under the same terms and conditions. He was confident the outstanding £1.5million balance would be repaid in due course – but his focus at this time is on the employees, not the money.

455 suppliers affected

Rhun ap Iorwerth AM (Plaid, Ynys Môn) said one company in his constituency was owed £175,000 – a lot of money for a small company.

The Economy Minister then dropped a bombshell (of sorts):

“In terms of some of those contracts and some of those businesses that could be directly affected by the demise of Dawnus, initial analysis of supply chain creditors indicates that there are in the region of 455 Welsh suppliers affected. The total value due to the Welsh supply chain is in the region of £6 million. Officials will continue to monitor and to review as fresh information is received from the administrator.”
– Economy & Transport Minister, Ken Skates

In reply to a question from Mike Hedges AM (Lab, Swansea West), the Minister reassured him that people whose jobs are affected by the Dawnus collapse would be offered the same support as that offered to workers made redundant at Swansea’s Virgin Media call centre.

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