A Moree builder, owed more than $600,000, could be forced to close his business if an agreement with the government is not reached.
Builders and sub-contractors, including Moree’s CJ and MR Catteral, have been told a payout from Federal or State Government is the only way to regain money lost through the ‘Building an Education Revolution’ (BER) scheme.
The out-of-pocket contractors attended a meeting with creditors last Wednesday.
They were told Reed Constructions - the company contracted by the government to carryout the BER constructions - was too broke to pay any of the $79 million owed to 1400 contractors state-wide.
Administrators confirmed the company’s debt exceeded $180 million.
Moree builder Chris Catteral was among those at the meeting.
Mr Catteral was contracted to complete building projects on six schools in Bellata, Moree, Yetman, Rowena and Boggabilla under the BER scheme initiated by the Federal Government.
The projects were completed during a three-year period until July last year.
Reed Constructions Group was contracted by the State Government to oversee and pay for projects completed in the North West, New England and Central Coast regions. They were given a share of the $16 billion set aside for the project to be held as retention money for paying the contract builders.
In October last year Mr Catteral invoiced the company for the final works on Moree East Public School, and received nothing back.
When he questioned why he had not been paid he was told Reed Constructions had “invested heavily in the mining industry” and were “a bit short on cash”.
Mr Catteral contacted the State Government’s Integrated Projects Office (IPO) who were unaware of any payment issues between Reed Constructions and contractors.
Within 24 hours they had called back and said there was a big problem as Reed was unable to pay the contractors due to financial difficulty.
On June 15 Reed Constructions went into voluntary administration, leaving Mr Catteral $642,000 out of pocket.
Mr Catteral said he had gone into the project thinking the money was guaranteed.
“I was wary about working for another company, but we needed the work, and the work was there. At a meeting in Tamworth the Reed representative told us the money for the job was guaranteed.
“It was a Federal Government stimulus - naturally you assume that it is safe money,” he said.
Mr Catteral is now facing having to fold his business if he cannot reclaim the money owed to him.
For the 1400 contractors state-wide, their only hope to regain the money is through either the State or Federal Governments, neither of which are willing to take responsibility.
Member for Parkes, Mark Coulton, asked Minister for School Education, Youth and Early Childhood Peter Garret how the Federal Government planned to address the issue, only to be told the responsibility lay with the state.
“I think that would be acceptable aside from the fact that there is a big sign out the front of the schools saying ‘this is a Federal Government initiative’,” Mr Coulton said.
“If the government didn’t have sufficient oversight into (Reed Constructions) they should take responsibility.
“It was a $16 billion massive scheme and these (contractors) have been very badly affected by it.”
Mr Coulton said he would be pursuing the issue in parliament on behalf of all the Parkes electorate contractors.
Administrators are currently investigating where the retention money was spent and whether Reed Constructions had undertaken any fraudulent activities.