Subcontractors fuming after State gives Grocon $14m despite unpaid bills and defects in Games Village

SUBCONTRACTORS desperate to be paid for their work on the Commonwealth Games Athletes Village have been told the site is “not a government project” as payments worth at least $2 million remain outstanding. But that’s not the worst of it.

THE State Government paid a $14 million bond to Games Village builder Grocon at handover, despite subcontractors being owed millions of dollars and defects still being fixed in the $650 million project.

And the Government is refusing to say who authorised the “performance guarantee” payment or why.

The revelation has stunned subcontractors, many of them small family owned businesses who have not been paid for work since September and are owed more than $2 million between them.

The Games village has been a controversial project. (AAP Image/Dave Hunt)

The Queensland Building and Construction Commission says it is powerless to act on the crisis since Grocon surrendered its Queensland building licence, following a suspension in October when it could not meet financial requirements.

The regulator says the company, which has signed its contracts over to its Melbourne headquarters, is no longer in its jurisdiction.

Adding to the frustration of subcontractors are claims from State Ministers the site is “not a government project”, despite the village being built on State land, for a State-led event that is majority funded by State taxpayers.

Flashback: Premier Annastacia Palaszczuk and Minister Sterling Hinchliffe inspect the site with Grocon Executive Chairman Daniel Grollo and site manager Michael Moore from Schoenauer Pty Ltd. Pic by Richard Gosling

One family business owner, more than $20,000 short in the countdown to Christmas, contacted the office of Housing Minister Mick de Brenni for help — and could hardly believe the response.

The contractor, who does not want to be named for fear it could jeopardise any payments, was told the apartments in the athletes village were not a government project so the Government could not pay for the completed work.

Someone had better tell Premier Annastacia Palaszczuk this is not the Government’s project.

“All through our contract for Parklands it refers to the Minister for Economic Development having to approve everything from design to timelines,” the contractor said.

“You cannot have it both ways and make demands of subcontractors for government projects and then, when payment is not received, wipe your hands of it.”

The Bulletin has spoken to two other subcontractors who say have received similar responses from staff of Commonwealth Games Minister Kate Jones and State Development Minister Anthony Lynham.

SHOW SOCIETY, GREYHOUND CLUB EVICTED FOR GAMES VILLAGE

Grocon national construction manager Peter Ward handing over the village to the State Government.

When the three ministers were questioned about the payment, the Government sent a single unattributed statement saying it was “doing everything in its power”, but would not say who authorised the payment to Grocon.

Responsibility for the project lies with Dr Lynham’s Department of State Development.

“At the request of Grocon, the State has made payments directly to some subcontractors for works they have undertaken on State Government-funded aspects of the project, such as roads, pathways and gardens,” the statement said.

“However, the subcontractor payments for the private development remain Grocon’s responsibility.”

Grocon national construction manager Peter Ward with Gold Coast Deputy Mayor Donna Gates and Commonwealth Games Minister Kate Jones.

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Grocon has said it has lost more than $20 million on the job and told subcontractors they will be paid before Christmas what they are owed for their work — six weeks after the payments were due.

Yesterday, it said it was still committed to paying subbies this month.

It would not confirm how much it owed, but confirmed it had been paid “a performance-based insurance bond”, known as “Grocon’s performance guarantee”.

The bond “related to achieving handover” and was not a retention payment, the company said.

Construction of the village was funded partly by the Government and by a partnership between Grocon and the Abu Dhabi Government.

The State will not reveal details of the arrangement, citing confidentiality of the contract struck by the Newman government.