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'Urgent review' into Pacific Highway contractor

The CFMEU is calling for a government inquiry into Roads and Maritime Services (RMS) tendering procedures.
The CFMEU is calling for a government inquiry into Roads and Maritime Services (RMS) tendering procedures. Caitlan Charles

UPDATE, 2.30pm: VOLUNTARY administrators have been appointed for Ostwald Bros as they prepare to table a report to the company's first creditors tomorrow.

Derrick Vickers and Sam Marsden, of Price Waterhouse Coopers Australia, have been appointed voluntary administrators of Ostwald Bros and two related entities; Ostwald Bros Civil Pty Ltd and Ostwald Bros Construction Materials Pty Ltd.

They have also been appointed liquidators of a third related entity, Ostwald Facilities & Accommodation Pty Ltd.

The Queensland-based engineering and construction services company employs about 470 workers.

Prior to tomorrow's meeting in Toowoomba, PwC said the administrators would be conducting an urgent review to ascertain whether the companies can continue operations. During this time, most employees will be stood down for about two days.

In a statement, Mr Vickers said: "We will work with all stakeholders to determine the current position of the company and explore every possibility to restructure it for the future."

Unable to attend tomorrow's meeting, one of the sacked subbies from the Pacific Highway upgrade at Glenugie rehashed their message for government intervention.

"We've built a road for them and they are ripping us off for it," the subbie said.

"It's just not fair for subbies."

She said if the union were "going to kick up a stink" about the issue the sub-contractor said it has to be about how subbies are paid.

 

UPDATE, 8.30am: THE CFMEU is calling for a government inquiry into Roads and Maritime Services (RMS) tendering procedures after the collapse of the sub-contractor on the Pacific Highway upgrade.

Initial investigations by the CFMEU into the most recent collapse this week suggest a sub-contractor may have fraudulently provided statutory declarations claiming to have paid all workers' entitlements so as to continue on the job.

Earlier this week Ostwald Brothers went into voluntary liquidation owing workers wages, backpay and legal entitlements such as superannuation and annual leave.

CFMEU Northern Organiser Dean Rielly said principal contractor's were obligated to ensure any sub-contractors they hired were up to date with payments including superannuation, workers compensation and long service leave.

However it appeared principal contractor Seymour Whyte's only vetting and auditing process was a signed statutory declaration from Ostwalds.

"At the same time that Ostwalds was providing statutory declarations that is was up to date with payments, workers were telling Seymour Whyte that they had not been paid," Mr Rielly said.

"The onus was really on Seymour Whyte management to look into workers' complaints."

Mr Rielly said if Ostwalds had knowingly signed false declaration saying all monies had been paid to employees and their own sub-contractors then RMS needed to act. Otherwise it would be seen to be endorsing the practice.

"Principle contractors are accepting unsustainably low tenders and then turning a blind eye to subbies ripping off workers.

"There needs to be some integrity in the issuing and signing of stat decs, and ramifications on parties who fill out false ones or who accept them knowing they are false or failing to take even rudimentary checks to see if they are false."

 

YESTERDAY, 1.30pm: HIGHWAY subcontractors have demanded answers from the state government as to why a primary contractor with extensive financial woes was tendered for works on the Glenugie to Tyndale section of the Woolgoolga to Ballina Pacific Highway upgrade.

Ostwald Bros, which is a Darling Downs-based civil construction company, announced last week it entered into voluntary administration. It came after the company sacked 200 workers from the site without any forewarning two weeks ago.

One sacked sub contractor Mary* said there were warning signs in the months prior to company's shock announcement. One of the most significant, Mary said was the five month payment stoush between Ostwald Bros and its sub-contractors.

Mary questioned why the state government and Seymour Whyte didn't dig deeper into the company's financials before awarding the tender for earthworks part of the project.

"They should have jumped on it sooner," she said.

Mary alleged her contract from Ostwald said subbies would be paid by the hour and initially that was the case.

However, Mary said earlier this month workers were back-charged pay after an Ostwald administration staffer visited the site and explained payment was based on a set number of hours worked.

One subbie was allegedly backcharged $9000, according to Mary.

He said an email was sent to all of Ostwald's subbies saying payment outstanding for May/June was unknown.

The pay dispute was no secret Mary said with Roads and Maritime and the lead contractor Seymour Whyte made aware of the stoush.

A Roads and Maritime Services spokesman responded to the concerns and said: "In accordance with NSW Government guidelines, financial assessments of companies (contractors) are carried out before any major contract is awarded".

The spokesman said the responsibility to screen company finances was on the primary contractor, Seymour Whyte.

"Contractors are responsible for assessing financial capacity and direct payments to subcontractors they engage. Ostwald Brothers was a subcontractor to Seymour Whyte Constructions Pty Ltd," he said.

"Roads and Maritime and the NSW Government will continue to carry out financial due diligence when assessing pre-qualified contractors for major contracts in line with the NSW Government Financial Assessment Services Scheme, managed by the NSW Department of Finance, Services and Innovation."

*Name changed to protect identity.

Topics:  editors picks glenugie northern rivers roads ostwald bros pacific highway upgrade roadworks state government tyndale


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