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