Reed subcontractors are being 'hung out to dry': CFMEU

30/05/2012 - The NSW government has been accused of hanging Reed Construction subcontractors out to dry after dumping the troubled company from four major road projects.

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Unions are demanding that subcontractors be paid for work completed after Roads Minister Duncan Gay tore up contracts to build more than $200 million of road projects after a long-running dispute over millions in payments.

The government is now searching for other contractors to run the Great Western Highway, the Newcastle Inner City Bypass and Alfords Point Bridge, but says Roads and Maritime Services (RMS) will probably become the head contractor on the Central Coast Highway.

Gay said the government would ask new contractors to give Reed subcontractors priority when work on the projects begins.

But the Construction, Forestry, Mining and Energy Union (CFMEU) says the government should pay subcontractors for work already done.

Reed's financial woes, which it blames on the government, have reportedly left hundreds of subcontractors between $60 million and $80 million out of pocket.

"Mr Gay has made no mention of whether the workers and sub-contractors will be paid for the work they have already completed," CFMEU NSW Secretary Brian Parker said in a statement.

"All he is suggesting is they effectively move on, forget about it and put their hand up to work with the next blokes the government appoints.

"It is an immoral attitude and is hanging sub-contractors and workers out to dry."

Reed has since February complained that the RMS and the Department of Education and Communities (DEC) owed it millions for building variations.

But the government disputed the claim and appointed lawyer and former judge Andrew Rodgers QC to review the allegations.

Last week his expert panel found the money owed to Reed was "minute if not nothing", Gay said.

Gay said it was inappropriate to use taxpayers' money to bail out Reed, adding that the government had paid the builder months in advance to help it meet its obligations to subcontractors.

"The problems with Reed and RMS and others are not the fault of the subcontractors - they did a pretty good job ... and should not be held responsible for a breakdown that has been happening for some time between Reed and the government over these contracts," Gay told parliament on Tuesday.

"These people are decent people, and the best thing that we can do is where possible to actually get them back to work so that there is income for their employees and for their families."

Reed Constructions has declined to comment, saying it will issue a statement on Wednesday.

Source: AAP

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Have your say...

TM | 30/05/2012 11:07 1

Reed was paid ahead of where it was on jobs, and that’s not right for the tax payers. Why this had to happen was it over budget? Reed management and all its sub-contractors are responsible for those costs. Were they delivering to the taxpayers the right way, were the public servants monitoring it right? So many projects don’t come in on budget. The source of those woes is it the public service, firms who get the contacts and their sub contractors need to be found out. Whether it’s one or all it has to stop. The waste at the NSW state levels with BER money was over 2 billion. What can't NSW now have due to that? It’s not good to see jobs go, but how much are the state tax payers being taken for granted. Many of these firms and sub-contractors see the government jobs as lurks. They get the basic job and the variations cost soar. It makes you wonder about the quality of our public servants writing and over seeing contracts too. In the public service people do wrong and are practically “unsacakable”. We are paying mega dollars for many roads that at best can be described at mediocre, I think the whole RTA and construction groups need to see the TV episodes of Megastructure on German autobahn, if we got 60% of those roads as major roads, we would be so much better off than we are today . When firms fail we never seem to look at if the workers doing a proper job, I have been to 700+ factories in my 26 years of work and I know how many Australians truly work? It’s not always management, I have seen a reasonable amount of laxity in those visits. This country is dommed if we dont get more efficient and raise productivity. Taiwan has no mines or big agriculture but has 400 billion foreighn reserves versus our massive debt. Most Australians would be surprised at the purchasing parity power per capita in taiwan and they are not low paid

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