Subbies saw it coming

Creditors gave early warning, writes Bill Hoffman

THE Premier, cabinet ministers, police and the Crime and Corruption Commission all received advanced warning of the conduct of a Central Queensland building group that has left a debt trail of more than $50m before heading into liquidation.

Despite the $31 million implosion of JM Kelly Project Builders in 2016, the Government continued to deal with the JM Kelly Group through another of its companies, JM Kelly Builders.

Government departments simply transferred 21 contracts from one entity to another, both of which had the same Rockhampton address.

JM Kelly Builders in turn went into administration in October last year and finally liquidation in November with debts of more than $20m.

Its general manager, John Murphy, had also been general manager of Project Builders and had been the subject of numerous complaints he had signed false statutory declarations that subcontractors and suppliers had been paid.

No charges have been laid over the collapse.

The entire group is now in liquidation with JM Kelly Builders leaving 397 unsecured creditors owed in excess of $11 million.

One company, sand and gravel extraction business Pink Lily Sands, is still being traded by the liquidator.

Subcontractors want the Queensland Government to make good their losses that run into millions of dollars on state infrastructure projects.

Subcontractors Alliance spokesman Les Williams said the State Government was the client and regulator responsible for licencing JM Kelly, as well as the authoriser of its Pre-Qualified Contractor status that gave it access to lucrative contracts.

One electrical contractor was so concerned in 2016 that he drove to Premier Annastacia Palaszczuk’s electoral office and refused to leave until staff had sent a copy of a previously unacknowledged email to her parliamentary chambers and secured notification of its receipt.

Craig Barlow of CJ Electrical had earlier sent emails to the Premier, the Minister of Housing and Public Works, the Police Minister and the then shadow housing spokesman detailing issues with non-payment or late payment of subcontracts by Project Builders on Queensland Government projects.

Mr Barlow said he would not stand by and see contractors and subbies not being paid while working on government contracts.

“People and businesses engage in Queensland Government contracts in the belief of guarantee of payment,” he wrote.

“If you complete a contract in a safe and timely manner showing quality of work, they get paid.

“Well, it is still not happening.”

Mr Barlow alleged the JM Kelly Group had signed statutory declarations guaranteeing payments had been made to subcontractors when that was not correct.

In his email Mr Barlow said allegations about the practice had first been made to the government in 2013 and claimed it occurred more often in the 12 months prior to the liquidation of JM Kelly Project Builders in June, 2016.

Complaints in writing to the government contract supervisor led to warnings to JM Kelly Project Builders manager John Murphy about the signing of false statutory declarations but the practice allegedly continued.

Just over two years later in its second report to creditors of JM Kelly Builders last month, liquidator PwC Australia indicated a number of creditors had been identified as not being paid.

PwC was to find more than 70 instances where the company records did not support its own assertions in statutory declarations that contractors and suppliers had been paid.