Transport for NSW admits failing to pay out road infrastructure contracts amid ICAC probe

A government department at the centre of an ongoing corruption probe has admitted it has failed to pay out millions of dollars in contracts. But it says it is because of an internal restructure and has nothing to do with ICAC.

Transport for NSW has admitted contracts for some road works have not been paid out, citing a significant restructure within the department. (File picture)

The state government has failed to pay millions of dollars to companies doing roadworks across NSW at the same time as an ICAC probe into the troubled industry has been widened.

A Daily Telegraph investigation has found company owners have been forced to cover huge costs after Transport for NSW failed to meet some contracts completed as far back as early 2024, and while the corruption watchdog continued its secretive inquiries.

The Independent Commission Against Corruption (ICAC) was last year revealed to be secretly investigating the inner workings of the transport tendering process amid claims of over-inflated contracts and preferential treatment.

Transport for NSW has denied it introduced a contract payout freeze amid the corruption probe, instead claiming an unrelated restructure of the tendering process was to blame for the tardiness in paying out some old contracts.

It claimed it was undertaking “an appropriate level of due diligence to paying contractors, irrespective of a payment being overdue or not.”

Transport for NSW said it was working with companies to sort out the payment of outstanding invoices which date back to last year. (File picture)

Exactly what that due diligence involved, and whether it included ICAC, was not revealed.

“We make every effort to ensure people doing business with us, and in the business supply chain, are paid on time for the work they do in accordance with their delivery contracts,” a Transport for NSW statement said following questions from The Daily Telegraph.

Contractors who have completed road infrastructure works are still waiting to be paid. (File picture)

“In changing our controls we acknowledge some invoices had previously not been processed in a timely fashion and we proactively engaged with impacted suppliers about this.”

But the excuse has not gone down well within the industry, with insiders stating the failure of the state government to pay its bills on time failed to “meet the pub test”.

Some companies have been placed under significant financial strain, leaving them forced to pay workers, subcontractors and suppliers out of their own pockets while they wait to be paid.

“We have all had people not pay us, but we never thought it would be the state government,” one industry insider said on condition of anonymity.

“Some of these guys could go to the wall if Transport (for NSW) doesn’t come to the party with cash for jobs already done. We are talking months and months and months.”

The offices of both the Transport Minister John Graham and Roads Minister Jenny Aitchison did not respond to questions about whether the delays in paying contracts was acceptable. File Picture: Monique Harmer

Both Transport Minister John Graham and Roads Minister Jenny Aitchison failed to reply to questions put to them about whether either minister believed a departmental restructure was a good enough excuse for the state government not to pay its bills.

The saga threatens to cause further political damage to the state government, with the office of Premier Chris Minns being briefed by bureaucrats over the potential fallout.

The Transport for NSW statement said the department was “simplifying” its operating model and had undertaken “organisational change” since early last year.

That included reducing the number of divisions from 10 to seven to “simplify the work we do across government and with the private sector”.

“As part of this change, we have been undertaking a program to make improvements to how we run procurement,” the statement said.

“We have recruited an experienced chief procurement officer and established centralised governance and assurance across Transport for NSW procurement.

“This involves aligning policy, processes and oversight functions, resulting in changes to personnel and improved procurement practices.

“While this work has taken some time, and is ongoing, it has not resulted in any payout freeze. There has not been any delayed or postponed infrastructure works as a result of any procurement and operating changes”.

When asked when the chief procurement officer was employed, Transport for NSW said they began their tenure in November last year, and would not comment on the exact amount still owed to contractors.

The department said the “new Transport for NSW statewide operating model” was launched on February 15, 2024.

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Originally published as Transport for NSW admits failing to pay out road infrastructure contracts amid ICAC probe