Join our daily newsletter At The Bell to receive exclusive market insights
- Laws to partly cover the payments of building subcontractors will be reintroduced by the WA government, following the collapse of construction firm Pindan
- According to the administrator of the folded construction firm, EY, the group collectively owes up to 1400 creditors between $70 and $80 million
- In September, the WA government announced new legislation to ensure a mandatory retention trust scheme for subcontractors on state projects but did not pass the bill
- Shadow Commerce Minister Vince Catania said Labor needed to deliver on its promise to protect subcontractors
- CFMEU national construction secretary Dave Noonan said it was a “national disgrace that workers, subcontractors and small businesses are left carrying the can”
Laws to partly cover the payments of building subcontractors will be reintroduced by the WA government, following the collapse of construction firm Pindan.
According to the administrator of the bankrupt construction firm, EY, the group owes up to 1400 creditors between $70 and $80 million.
Tuesday afternoon, three Pindan companies went into administration, while nine others had gone straight into liquidation.
Sam Freeman from EY told ABC they have let approximately 135 people let go within the Pindan group.
Pindan Group is currently working on many state government initiatives in Western Australia, including a $35 million annual social housing maintenance deal.
In September, the WA government announced new legislation to ensure a mandatory retention trust scheme for subcontractors on state projects but did not pass the bill.
The legislation would require that head contractors be paid within a few weeks and that head contractors pay subcontractors in a timely way.
Commerce Minister Amber-Jade Sanderson told 6PR that the bill will be reintroduced as soon as next week.
“We’ve seen over many years, contractors and subcontractors really fall short of the standards in terms of payment and security,” she said.
“It is incredibly devastating to hear for those subcontractors the events around Pindan.”
Shadow Commerce Minister Vince Catania said Labor needed to deliver on its promise to protect subcontractors.
“In the lead up to the 2017 State election, Labor promised better protections for subcontractors, in recognition of the significant risks they take on. This included establishing a trust account for Government projects to guarantee payments were made between head contractors and subcontractors,” he said
“Labor never delivered on this promise, leaving subcontractors vulnerable to devastating losses in the event of the head contractor entering administration,” he commented.
Catania said local contractors had also queried whether Labor’s new payment terms policy was being followed.
“For works and construction payments for Government contracts, a mandatory 20-day payment timeframe following the receipt of an invoice was supposed to be in place from April 1 this year,” he added.
“Local subcontractors are now telling me they have been waiting on payments for many months, and in several cases are owed more than $100,000, which represents a significant risk for their businesses if they are not paid soon,” he concluded.
CFMEU national construction secretary Dave Noonan said it was a “national disgrace that workers, subcontractors and small businesses are left carrying the can”.
“The industry requires consistent national laws rather than piecemeal rules that savvy developers can drive a truck through, safe in the knowledge that they won’t be held to account,” he said.
“Australia needs effective national security of payment laws and statutory trusts to ensure workers, subbies and downstream businesses are paid for the work they do,” Noonan continued.
“State and federal governments need to act if they want to look after workers and subbies. The WA government has yet to even put to the parliament its long-promised but watered-down statutory trust laws,” he concluded.
City of Fremantle director of city business Glen Dougall said the $270 million Walyalup Civic Centre, which Pindan was constructing, is 90 per cent finished and they are confident it can be completed.
“Over the coming days the City will be considering its legal position and speaking with the administrator to ascertain exactly where we stand and what needs to be done to move our project forward,” Dougall said.
“Participating subcontractors working on the project are guaranteed payment thanks to the inclusion of a Project Bank Account as a key condition of the construction contract,” he continued.
“The PBA guarantees participating subcontractors have been paid, and will continue to be paid, within one day of funds being deposited into the account. We insisted on this arrangement to ensure the local subcontractors employed on the project were safe from any potential cash flow problems and could be confident in employing and paying their staff and suppliers,” he concluded.
