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Public-funded rip-off

Saturday, 12th January, 2013

By Andrew Robertson

Contractors and suppliers burnt by the Eco Village teacher housing project say they are unlikely to see a cent of the tens of thousands of dollars owed to them.

Six months after the taxpayer-funded six unit village in Sulphide Street was officially opened, virtually every local business involved in its construction is still out of pocket.

And they believe there is little chance they will ever see their money, with the company that subcontracted them, Cavalier Brisbane, now under administration and millions of dollars in debt.

Work on the project, touted for its environmentally-friendly materials, began in 2011 but fell behind schedule amid claims Cavalier was not paying accounts or meeting progress payments.

Bolton’s Engineering is still owed more than $13,000 after supplying and fitting steel brackets.

But owner Jamie Bolton said that was nothing compared to the larger creditors who would be first in line to receive some money back, after the administrators took their fee.

He said he last spoke to someone from the firm acting as administrator two or three months ago.

“They pretty much said ... ‘unfortunately you are not going to get any dividend’.”

While the experience has left the small business owner with a bad taste, he is most bitter about the fact the houses were built with taxpayers’ money.

“My biggest annoyance out of the whole thing is this is a government project ... This is our money that’s built these bloody houses.”

Albury company Zauner Construction won the tender for the multi-million dollar NSW Teacher Housing Authority project and sub-contracted the job to Cavalier Brisbane.

Some contractors refused to return to the site until they received progress payments from Cavalier which was eventually kicked off the project.

Zauner refused to pay any of the outstanding amounts to contractors and suppliers, saying it had honoured all of its contractual responsibilities with Cavalier.

But Donna Timperio, whose husband’s building company is still owed thousands by Cavalier, said Cavalier should never have been allowed near the job.

She said the financials of all contractors who apply to work on large government construction jobs are supposed to be vetted.

Had a financial assessment been done on Cavalier, it would have found the company to be in deep financial trouble, according to Mrs Timperio.

“I think they (Cavalier) were pretty much done and dusted by the time they came down here.

“Was there a financial assessment done and, if it was, how did they slip past?”

Mrs Timperio also isn’t expecting to see any money from the administrators.

“By the time the administrators take their cut there’ll be little left,” she said.

“I’m pretty sure everyone is the same.”

Local plumber John Lehmann said Zauner should have employed the local contractors in the first place instead of subcontracting the job out to Cavalier.

“Zauner had the job; they should have got the sub-contractors in ... which they ended up doing anywhere.”

He also said some of the blame needed to be taken by NSW Public Works, which acted as the project overseer.

Mr Lehmann, who made sure he received regular progress payments from Cavalier, could not recall a worse case of contractors being burnt on a job.

“It’s happened before but not on this scale.”

The company appointed as the administrator to Cavalier Brisbane, Jirsch Sutherland, did not return a call from the BDT yesterday.

Last year, the State Government established an inquiry into construction industry insolvency in response to the failure of two large construction companies last year.

The inquiry committee was supposed to hand its final report to the Minister for Finance and Services in November last year, but failed to make the deadline.

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