Oz builder’s creditors seek $40m

Creditors of a failed arm of Australianowned prison builder Decmil Construction are claiming $40 million from the business, which went into liquidation this month.

Dermott McVeigh of Perth’s Avior Consulting has released his first report into the business contracted to produce accommodation for nearly 1000 prisoners on five sites in Christchurch, Wellington and Tongariro.

Dozens of New Zealand businesses including electricians, builders, plumbers, material suppliers, lawyers, equipment hire, banks and major crane hire businesses are on the creditor schedule.

“It’s been a total double-whammy for us,” complained one creditor this week. “There’s been this [liquidation] and then the five-week lockdown when we couldn’t work.”

Another said he hoped money could be recouped and work might resume.

Both said the Department of Corrections, which contracted Decmil to build the Chinese-imported prison units at existing facilities, had kept them well-informed.

Both also said Corrections had asked them not to speak about the situation, and they hoped to return to the sites.

The schedule shows Decmil Australia is the largest creditor, claiming $25.2m.

Corrections and Decmil are locked in a dispute, Corrections claiming $12m and Decmil claiming $12.5m.

In 2017, Corrections named the ASX-listed company as the preferred contractor for $60m “modular prison cells” — two at Rolleston Prison and one at Tongariro Prison.

Decmil’s New Zealand prison project expanded to three other sites and rose to nearly 1000 new prison beds. In 2018, the contract was varied with an additional five units to be built at Christchurch Men’s Prison, Christchurch Women’s Prison and Rimutaka Prison.

McVeigh said in his first report the company was put into liquidation this month because of an unresolved dispute with Corrections on the major contract.