The Gold Coast Bulletin

VILLAGE IDIOTS

State gave Grocon $14m bond despite defects and unpaid bills for tradies

- KATHLEEN SKENE BUSINESS EDITOR

THE State Government paid builder Grocon a $14 million bond at the handover of the Commonweal­th Games Village, despite subbies being owed millions of dollars and defects still being fixed.

And Labor is refusing to say who green-lighted the payment or why.

Because Grocon no longer has a Queensland building licence, authoritie­s say they are powerless to act.

The revelation has stunned subbies, many of them small family owned businesses who are owed more than $2 million between them.

Labor ministers yesterday refused to answer questions about payments for the village, saying it was “not a Government project”.

THE State Government paid a $14 million bond to Games Village builder Grocon at handover, despite subcontrac­tors being owed millions of dollars and defects still being fixed in the $650 million project.

And Labor is refusing to say who authorised the “performanc­e guarantee” payment or why.

The revelation has stunned subcontrac­tors, many of them small family owned businesses whom have not been paid for work since September and are owed more than $2 million between them.

The Queensland Building and Constructi­on Commission says it is powerless to act on the crisis since Grocon surrendere­d its Queensland building licence, following a suspension in October when it could not meet financial requiremen­ts.

The regulator says the company, which has signed its contracts to its Melbourne headquarte­rs, is no longer in its jurisdicti­on.

Adding to the frustratio­n of subcontrac­tors are claims from State Ministers the site is “not a Government project”, despite the village being built on State land, for a State-led event that is majority funded by State taxpayers.

A family business owner, more than $20,000 short on the eve of Christmas, contacted the office of Housing Minister Mick de Brenni for help – and could hardly believe the response.

The contractor, who does not want to be named for fear it could jeopardise any payments, was told the apartments in the athletes village were not a Government project so the Government could not pay for the completed work.

“All through our contract for Parklands it refers to the Minister for Economic Developmen­t having to approve everything from design to timelines,”

the contractor said. “You cannot make demands of subcontrac­tors for Government projects and then, when payment is not received, wipe your hands of it.”

Two other subcontrac­tors say they received similar responses from staff of Commonweal­th Games Minister Kate Jones and State Developmen­t Minister Anthony Lynham.

When the three ministers were questioned about the payment, the Government sent a single unattribut­ed statement saying it was “doing everything in its power”, but would not say who authorised the payment to Grocon.

Responsibi­lity for the project lies with Dr Lynham’s Department of State Developmen­t.

“At the request of Grocon,

the State has made payments directly to some subcontrac­tors for works they have undertaken on State Government-funded aspects of the project, such as roads, pathways and gardens,” the statement said. “However, the subcontrac­tor payments for the private developmen­t remain Grocon’s responsibi­lity.”

Grocon has said it has lost more than $20 million on the job and told subcontrac­tors they will be paid what they are owed before Christmas – six weeks after the payments were due.

It would not confirm how much it owed, but confirmed it had been paid “a performanc­ebased insurance bond” by the Government.

The bond “related to achieving handover” and was not a retention payment, the company said.

Constructi­on of the village was funded partly by the Government and by a partnershi­p between Grocon and the Abu Dhabi Government.

Small businesses were forced to sign statutory declaratio­ns before they could claim payments from Grocon, confirming they could be paid.

They cannot understand how the Government could hand over cash without requiring the same guarantee.

“I don’t think the Government understand­s the strain that non-payment by big business puts on small businesses in the constructi­on game,” a subcontrac­tor said.

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 ??  ?? Gold Coast Deputy Mayor Donna Gates, Commonweal­th Games Minister Kate Jones and Grocon national constructi­on manager Peter Ward at the handover of the athletes village in late September.
Gold Coast Deputy Mayor Donna Gates, Commonweal­th Games Minister Kate Jones and Grocon national constructi­on manager Peter Ward at the handover of the athletes village in late September.
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