Help for Sydney tradies, not ours
A ONE million dollar taxpayer-funded bailout will help out-of-pocket building sub-contractors in Sydney but Coffs Harbour’s affected tradies hold faint hopes of a government rescue package.
Neither the State Government nor Coalition could yesterday commit to covering Perle Construction’s debts of $1.7 million owed to the local building industry, not to mention its $10 million debts statewide.
Yet NSW Education Minister Verity Firth has announced a rescue plan to assist 28 sub-contractors owed up to $5-million following the collapse of Maintek Projects Pty Ltd.
Maintek Projects and Perle Constructions went to the wall while completing Keneally and Gillard Government “stimulus package” projects.
Perle was undertaking Housing NSW projects, while Maintek struck difficulty completing 10 Building Education Revolution (BER) in Sydney’s northern suburbs.
In all, three companies have collapsed this year working under primary government contractor Bovis Lend Lease.
The construction giant, however, has reached a deal with the Government to pay up to $1.4 million it was holding in progress payments for Maintek to the sub-contractors.
Housing Minister Frank Terenzini’s position yesterday was that Perle’s receivers can not be paid out due to a major difference between Education and Housing projects which is little comfort to the many local families struggling to pay their bills.
Mr Terenzini said Housing construction projects were directly engaged on “fixed price” contracts, meaning the builder gets paid for the work done, as it gets done – and the builder pays the sub-contractors.
“The difference between Education and Housing is that Education had not yet paid the bills it owed when Maintek went into administration so it has that money available,” Mr Terenzini said. “Housing had paid its bills up to date when Perle went into administration.
“In Education’s case, they do not have to pay the money to the administrator, because they have taken over the contract. In Perle’s case. assets and liabilities are pooled for distribution across all projects managed by Perle, not just Housing NSW projects. Housing money would be distributed to many subbies who never worked on Housing projects.”
With news of the rescue package, member for Coffs Harbour Andrew Fraser called on the State Government to make good on the payments owned under the Housing Stimulus Package.
“I am also calling on the State Government to finally admit liability and to admit that the contracts were not let in the correct way, that protocols were not followed and to pay all the sub contractors in Coffs Harbour who have lost $1.7 million,” Mr Fraser said.
“The Minister has still not provided to me the financial assessment which a member of his staff said the financial assessors ‘did not write glowing reports’ in relation to Perle Pty Ltd, yet the Department still engaged them as contractors on the Coffs Harbour jobs.
“Surely this is a clear indication of negligence on behalf of the Department of Housing which would make them liable to make good the debts incurred by Perle.
“I am still yet to receive the signed contract between Bovis Lend Lease and the State Government and the pro forma contract I have received clearly indicates that Bovis Lend Lease must follow NSW Government protocols in relation to contracting. I don’t believe this was done either,” he said.
Sub-contractors in Coffs Harbour have instigated legal proceedings.