Why subcontractors are furious over Vic Gov’s $4.3m school upgrade debt

Several tradies have been ripped off half a million dollars on three government school projects, forcing some to take out second mortgages and pushing others to the brink.

Subcontractors Anthony Richardson, Alex Gheorghiu and Aaron Lafranchi allege they’re owed a share of $4.3m from the Department of Education for work on three school projects. Picture: Ian Currie

Furious tradies owed $4.3m for completing building upgrades at Victorian schools say they feel “numb” as the state government uses taxpayer cash to take them to court and avoid paying their bills.

At least a dozen subcontractors are fighting for payments after completing six weeks of work at three schools earlier this year for construction group Roberts Co, before it went into voluntary administration on March 14.

The Department owed Roberts Co more than $5.8m at the time, with a subsequent adjudication determining the company and subcontractors were entitled to $4,335,421 plus accruing interest for their work.

The Coburg High site has been fenced up for six months after Roberts Co went into administration. Picture: Ian Currie

The government body was given a deadline of August 29 to pay under the Building and Construction Industry Security of Payment Act 2002.

Instead, it’s spending taxpayer money to dispute the ruling in the Supreme Court, adamant it does not have a contract with subcontractors.

Subcontractors for Accountability member and plumber Aaron Lafranchi said the government was putting workers at risk of second mortgages, business losses, a mental health crisis and even suicide after it effectively took “our labour and materials for free”.

“To them it might just be a dollar on a spreadsheet or an email to a lawyer, but for us it’s our lives, our families, our employees, and our communities,” he said.

In a cruel twist, the Supreme Court fight comes as the Victorian Government has introduced “tough” new laws to help subcontractors recover money they’re owed.

Mr Lafranchi accused the government of hypocrisy, arguing its failure to pay up is “not only unjust” but goes “directly against” its Fairer Payments on Jobsites Bill.

He is owed $210k after installing roof and wall cladding at the new Coburg High School Technology Hub site, and said the ordeal has had a “massive impact”.

“I spent my days and nights stressed, trying to figure out how to keep paying my 12 employees, cover materials, and keep a roof over my own family’s head,” he said.

“The hardest part is trying to understand how a government could do this and act as though they don’t care, effectively taking our labour and materials for free.”

Administrators McGrathNicol wrote a letter to subcontractors informing them the state government owed them money. Picture: Supplied

A subsequent adjudication determining the company and subcontractors were entitled to $4,335,421 plus accruing interest for their work. Picture: Supplied

Metarom Steel Director Alex Gheorghiu took on the Coburg High job thinking it was a financially “safe” decision, but instead it was the first time in eight years he had never been paid for a job.

“I never imagined seeing something like this happen in Australia … and it happened on a government job,” he said.

Giant Plumbing director Anthony Richardson, who is owed more than $500k for hydraulic and civil works, echoed the sentiment.

“I’ve got a young family, and it’s hard to explain why I’m working harder than ever but feel like I’m going backwards,” he said.

“If the government can’t protect the tradies that actually build their schools, who will want to work on these projects in future? This isn’t just numbers on a page, it’s people’s livelihoods.”

Opposition spokeswoman for education Jess Wilson slammed the government’s failure to pay for the completed works as “shameful”.

“The blatant hypocrisy of the Labor Government refusing to pay subcontractors while also introducing legislation that is meant to ensure ‘subcontractors get paid on time and in full’ is astounding,” she said.

Aaron Lafranchi (right) warned the Department’s actions were “forcing people into second mortgages, mental health crises, business losses, and suicide. Picture: Ian Currie

Education minister Ben Carroll said “his heart goes out” to the affected tradies, but would not take responsibility for their failure to be paid.

“We paid every bill that was issued to us by Roberts Co before they went into administration,” he said.

“I urge the administrators to pay the tradies, to pay the subcontractors what they owe.

“They are now in court as well, so I cannot comment any further.”

A Department of Education spokesman confirmed the VSBA had commenced proceedings in the Supreme Court in relation to its contract with Roberts Co.

“As a result, we are unable to comment further,” he said.

Meanwhile, the three construction sites at Coburg High, Hallam Secondary and John Fawkner Secondary College remain an eyesore, after being fenced up for six months while the Victorian School Building Authority scrambles to find a new contractor to complete the works.

Roberts Co’s administrator McGrathNicol was unable to comment as the matter was before the courts.

Originally published as Why subcontractors are furious over Vic Gov’s $4.3m school upgrade debt