GREEN LIGHT: Queensland Rail transferred building contracts worth $1.5 million with Walton Qld to another company on the strength of one phone call.
GREEN LIGHT: Queensland Rail transferred building contracts worth $1.5 million with Walton Qld to another company on the strength of one phone call. Brett Wortman

$1.5m call by Walton

A PHONE call on September 26 last year was all it took for Queensland Rail to agree to transfer contracts worth more than $1.5 million from Walton Qld to another company set up by the failing builder's business advisors.

The transfer, to the now ailing Tantallon, took effect two business days later on October 1 just two days before Walton went into administration.

According to documents produced by Walton liquidator Lawler Draper Dillon, the new company would have collected in excess of $600,000 worth of invoices owed Walton by QR as well as cash bonds tied to that work. At the time Walton was running about six weeks behind on the contracted practical completion date for QR's Cleveland Station refurbishment and work on the South Brisbane Station.

A $1.5 million contract for the construction of QR's Central Station ticket office also was transferred, which would have produced an estimated $100,000 profit for Tantallon.

>> DOWNLOAD TODAY'S SUNSHINE COAST DAILY FOR MORE ON THE WALTON CONSTRUCTION GROUP COLLAPSE

Queensland Rail has admitted that the transfers occurred on the strength of a phone call it received on September 26 last year that Walton Constructions Qld Pty Ltd was restructuring its operations and wanted to transfer the contracts to Tantallon Constructions Pty Ltd (then known as Peloton Builders Pty Ltd).

Walton business advisers, the Mawson Group, set up two companies in August last year in a bid to secure the transfer of profitable contracts before the Victorian-based builder went into liquidation.

In all more than $17 million worth of Walton work in progress, company records, computers, office and other equipment were transferred without independent valuation and without the assets being offered to the market.

Queensland Rail acting CEO Helen Gluer launched an independent review into the circumstances surrounding the transfer immediately issues associated with the two companies were brought to her attention on February 28 this year.

Queensland sub-contractors owed more than $30 million for work completed for Walton have united in an attempt to recover the money and to bring to account all those who were parties to their loss.

The State Government, through the Queensland Construction and Building Commission, has agreed to help fund a public examination of the matter. Sub-contractors want not only Walton's sole director Craig Walton called to give evidence but also Walton clients who transferred contracts to two companies, Tantallon and Lewton Asset Services which went into liquidation nearly a month ago.

Tantallon announced a week ago that it was winding-down its operations at the completion of the Queensland Rail contracts.

Ms Gluer said her independent review had "indicated that Queensland Rail acted in good faith based on information provided to it by Walton Qld at the time it agreed to transfer contracts to Tantallon".

However construction industry insiders say the projects should have gone to the company beaten at tender by Walton for the work.

"Our priority is ensuring our two current projects with Tantallon - Central Station upgrade and Mayne Control refurbishment works - are completed as safely, quickly and cost effectively as possible with all sub-contractors who provide services on those projects being paid in full for their work,'' Ms Gluer said. "I have appointed a senior executive to oversee the completion of our two remaining contracts with Tantallon."

In response to questions put by the Daily, Queensland Rail said it was advised by Walton Qld that the proposed transfer of its contracts to Tantallon was part of a restructure and that the business, people and systems associated with the contracts would remain the same.

A Queensland Rail spokesman said that at the time of transfer of the contracts from Walton Qld to Tantallon, Queensland Rail held retention monies on several of Walton projects.

"The liquidator of Walton Qld subsequently advised Queensland Rail in December 2013 retention-related works on the transferred contracts could be completed by Tantallon and the associated retention amounts could be dealt with accordingly,'' the spokesman said.

Queensland Rail said it had received statutory declarations from Tantallon with each payment claim formally declaring that all subcontractors had been paid all amounts due and owing to them.


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