Engineering group UGL, which is working on Melbourne's Metro Trains and Brisbane's Cross River Rail projects, has told suppliers materials and services that it will delay paying their bills by at least two months.
The delay by UGL, which specialises in rail projects and is owned by Australia's biggest construction company CIMIC, highlights the pressure contractors are under to manage cash flows as they work on tens of billions of dollars of infrastructure projects.
UGL has sent a letter to suppliers and sub-contractors telling them that from October 15, they will be paid 65 days after the end of the month in which their invoices are issued.
The company's policy was previously to pay bills within 30 days, according to sub-contractors. CIMIC, which bought UGL in a hostile takeover in 2016, declined to comment.