Council’s extra support for subbies ‘lacks detail’
Sunshine Coast Council’s attempts to protect subcontractors have been criticised for not being tough enough to make a meaningful difference to the construction industry.
Mayor Mark Jamieson announced changes on the council’s construction work contracts would be implemented from June.
It came after the collapse in January of Ri-Con Contractors that left subbies thousands of dollars out of pocket.
The construction company was favoured by Sunshine Coast, Noosa and Gympie councils.
Ri-Con Contractors was awarded the $3.48 million head contract for the Caloundra Tennis Centre, which was officially opened last Tuesday.
The company was working on the council project when it went bust, owing debts of more than $4 million with $3.4 million owed to more than 300 unsecured creditors including subcontractors.
“Unfortunately there are issues in the construction sector and the Queensland Government has plans in place,” Cr Jamieson said.
“The council has already indicated preparedness so hopefully it will get better in the future.”
He said he was unable to comment directly on Ri-Con due to legal matters.
“Obviously council officers will do their best in any circumstances to ensure no one is disadvantaged, but there are always variables,” Cr Jamieson said.
The new measures include giving the council the ability to review contracts at any time, introducing a new subcontractor register for each contract and strengthening statutory declaration requirements.
Subcontractors Alliance head Les Williams said changes lacked detail and criticised the council for not bringing forward Project Bank Accounts.
“Really to me it lacks detail and means nothing, the only way to protect subbies is to bring Project Bank Accounts in now,” he said.
“There’s no reason why they can’t bring it forward.”
Project Bank Accounts will be mandatory for all construction projects in Queensland worth more than $1 million from July 2022.
It requires projects to have three trust accounts, where progress payments, disputed funds and retention moneys are held in trust for head and subcontractors until payments are due.
Mr Williams said the alliance was not consulted on the council’s new measures.
“(Cr Jamieson) knows there’s problems in the construction industry and council’s not addressing it,” he said.
“Who does he think generates the economy?
“It’s the subcontractors and small businesses.”
Ri-Con Contractors liquidator Paul Nogueira of Worrells Solvency said a call had gone out for assistance from creditors.
“We’re at a stage where we really need creditors’ assistance to fund various claims we’ve identified so we can try to get a return for them,” he said.
“We have not received any positive responses at this stage.”