Failed builder gave council statement subbies were paid
FAILED builder Ri-Con Contractors provided Sunshine Coast Council with monthly statutory declarations its subcontractors working on the Caloundra Tennis Centre had been paid.
Noosa Council won't reveal whether it had received the stat decs, saying only that it was seeking legal advice on the impacts of the insolvency.
"It would be inappropriate to comment further at this time whilst legal advice is being obtained," a spokesman said.
A Sunshine Coast Council spokesman said throughout the course of the contract's monthly payment process, the council had continued to request and receive the declarations from the contractor.
Ri-Con Contractors Pty Ltd entered liquidation on Monday with debts totalling more than $4 million including $3.4 million to more than 300 unsecured creditors including subcontractors.
Of that money $1.2 million had been held in retentions, $1.1 million had been owed for 90 days or longer and a further $1 million for up to 60 days.
The council spokesman said at the time of the liquidation Ri-Con had been working for it on only one project, the tennis centre.
"Council takes all reasonable and required actions in relation to subcontractors working on its projects, noting that their legal and contractual relationship exists with the contractor (not council) and the contractor is responsible for ensuring its subcontractors are paid," the spokesman said.
Subcontractors Alliance head Les Williams said the council should appoint a builder to finish the job who was willing to engage subbies who were working on the project.
And he said the losses would never have occurred if both Sunshine Coast and Noosa councils had required Project Bank Accounts to be in place to secure money owed to subcontractors.
"Why wouldn't they undertake a process to protect their own small business community?" Mr Williams said.
"Given the publicity about and frequency of these events and how many we have had here, there's been no duty of care.
"It's just the usual cop-out."
Sunshine Coast Council said the use of Project Bank Accounts had been restricted to Queensland Government contracts valued at more than $1 million.
"Council is not aware of any local government in Queensland that has instituted Project Bank Accounts," the spokesman said.
Mr Williams said that didn't mean to say the two councils couldn't have shown initiative and introduced them to all work they tendered.
"Both councils are blame shifting," he said.
"There is no barrier to them bringing in Project bank Accounts, particularly given they were aware of payment security issues in the industry.
"They've been hiding under a rock if they don't. The sooner they move towards introducing them on their projects to protect local subcontractors the better."