Sub-contractors in New South Wales could lose money that is owed to them and major road construction projects could be delayed by up to one year following the government’s decision to replace troubled roads contractor Reed Constructions, state opposition leader John Robertson has warned.
Robertson, who has called on the government to act quickly to find a new contractor, has warned that sub-contractors are going to be the big losers from the debacle.
“The tragedy with the Reed Construction circumstance is that these are contractors, many of whom are going to lose money that is owed to them” Reed told reporters on Tuesday.
The warnings follow Monday’s decision by New South Wales Roads Minister Duncan Gay to cancel contracts worth more than $200 billion.
Reed, which collapsed in February owing up to 1,500 sub-contractors between $60-$80 billion, had claimed it was owed money for work completed on government contracts. Gay, however, denies this, saying instead that the company had been paid in advance to enable it to meet commitments to sub-contractors.
Robertson says major road projects, including works on the Great Western Highway, the Central Coast Highway, the Newcastle Inner City Bypass and Alfords Point Bridge will now be delayed, and that the government must act quickly to find a replacement contractor.
“Those projects are now likely to be delayed by anywhere between six and 12 months,” Robertson says.
“It’s [the government] made the decision to cancel the contracts with Reed – that’s going to delay these projects and the longer this government sits around thinking about what it’s going to do with contractors, the longer the community is going to suffer”.
The cancellation of Reed’s contracts follow last week’s decision by the state government to cancel public housing contracts with another contractor, St Hilliers Constructions Pty Ltd, after that company went into voluntary administration.