FREMANTLE council’s CEO says he is confident the city is in a “good position” despite Tuesday’s collapse of building firm Pindan Group before it had completed the new Walyalup civic centre in Kings Square.
Pindan went into external administration just days after media outlets aired rumours it owed creditors $100 million; even before the official announcement to shut down its 68 active projects, the Chook met subcontractors heading home from the Kings Square project, worried they’d turn up the next day to find their tools locked up.
CEO Philip St John told the Herald on Thursday the council was already exploring options with project manager Sirona Capital and Pindan’s administrators Ernst & Young to get the project moving again, but couldn’t tell how long it would be delayed.
“The contract between the city and Pindan includes safeguards which will help in mitigating against the more serious financial problems that would otherwise arise when a builder goes into liquidation,” Mr St John said.
“We stress that this is a complex and unexpected issue, and unfortunately it may take some time to resolve the question of how best to move the project forward from here.”
Mr St John said sub-contractors on the job were given the chance to be paid from a project bank account independent of Pindan, meaning those who opted in had already been paid and would be guaranteed of paid work moving forward.
Premier Mark McGowan has already flagged going direct to sub-contractors to complete state government jobs, and a council source said this could be something Sirona and the council had been looking at. But the premier is also under pressure for not following through on a years-old election promise to introduce protections for contractors such as those implemented by Fremantle.
CFMEU organiser Simon Stokes said a week before the company went under, there were whispers that Pindan employees were walking away from the site and sub-contractors were hanging around with nothing to do.
He said it was “not a sustainable work environment” the day before it was abandoned.
Mr Stokes was also critical of the council’s decision to use Pindan despite its tender being $10 million lower than its nearest competitor: “Locals petitioned to not use Pindan prior to construction.”
He said it was obvious there were problems with the job.
“You have to be the lowest bidder and therefore have to do the crappiest job.
“[It leads to] compromising with cheaper and poor quality materials.”
He said Pindan had used inferior steel from Vietnam which had bowed when installed, prompting the union to lodge a complaint with Worksafe, though they never heard back about any investigation.
“The great irony is it would have been cheaper if they originally went with Probuild,” Mr Stokes said. Probuild was used by Sirona for its side of the Kings Square renewal project.
Mr Stokes said the premier had to act to protect the state’s booming construction industry.
“The WA construction industry is operating well below a level that is safe, viable and sustainable,” he said.