Construction of a major Sydney railway line has been thrown into turmoil as a key subcontractor on the project has been terminated over potential criminal conduct.

The NSW Government has announced that concreting and formwork contractor Future Form has been removed from the state’s Western Sydney Airport Metro project.

This follows an investigation into probity issues on the project.

The alleged conduct has been referred to police and other investigation authorities.

Billed a city shaping development, the $11 billion Western Sydney Airport Metro project is a 23-kilometer rail line that will link the new Western Sydney International Airport and Bradfield City Centre with the existing Sydney metropolitan railway network at St Marys.

It will feature six stations, 9.8 kilometers of twin tunnels and 10.6 kilometers of elevated viaducts.

However, the project is beset with problems amid a dispute between the NSW Government and the main consortium which is responsible for delivery over who should pay for billions of dollars in cost overruns.

Last Wednesday, the Australian Financial Review reported that Italian infrastructure giant Webuild had curtailed work on the project as the dispute escalated.

Webuild is part of the Parklife Metro consortium that is delivering the Stations, Systems, Trains, Operations and Maintenance (SSTOM) package for the new line.

According to the AFR report, the consortium has asked the government to contribute an additional $2.2 billion to cover cost overruns.

The escalation has raised further concern over the project’s delivery timeframe.

Originally, the line was to open before the first passengers arrived at the new airport later this year.

However, the government has conceded that this will not occur and is now targeting a 2027 opening date. (Until the project is complete, passengers who arrive at the new airport will be ferried along the route by free buses.)

According to the article, however, there is concern that the dispute could see the project’s completion pushed back until late next year or even into 2028.

Subcontractor terminated

In the latest development, the NSW Government has announced that subcontractor Future Form Civil Pty Ltd has been terminated and referred to police and enforcement agencies over probity issues.

Last September, Sydney Metro commissioned Max Kimber SC to investigate contracting on the project.

This followed media reports of potential criminal activity and breaches of workplace laws.

According to the NSW Government, a report which Kimber has prepared following his investigation has made several findings about Future Form and numerous downstream contractors whom it engaged.

(The report remains confidential and has not been released. A NSW Government says that the report is not able to be released as it has been handed to the agencies listed below for further investigation.)

From July 2024, Future Form has been engaged by Webuild to perform four subcontracts in respect of the project.

These refer to formwork, reinforcing and concrete pouring services as well as the provision of construction workers.

Future Form then allegedly sourced labour from downstream contractors. This was allegedly done without the company either gaining approval or disclosing what it had done as it was required to do.

Due to its complex contractual chain, the investigator believes that Future Form was unable to track who was on site, what they were doing and how much they were being paid.

This includes an inability to verify basic details on invoices worth more than $10 million.

In one instance, Kimber has reportedly found that at least one worker was asked to be paid ‘cash in the hand’ before having money transferred to his bank account by an unknown subcontractor.

Text evidence shows that the man was instructed to say he was working directly for Future Form rather than the unnamed subcontractor.

An email claims ‘some other workers are on social benefits and working for cash’.

According to the Government, the Kimber report has also found:

• Potential evidence of corporate fraud. A number of labour supply companies were incorporated within days of each other and to the same residential address. The companies had the same director and secretary and sent invoices and verifying material to Future Form over the Signal app, through which messages later self-delete and erase all information.
• Potential insurance fraud by at least one contractor, with significant discrepancies between its notification to iCare and its payroll records.

Kimber noted that key individuals from subcontracting organisations refused to cooperate with his investigation.

The report has been referred to agencies who have the power to compel witnesses and documents.

These include:

• NSW Police
• NSW Crime Commission
• Independent Commission Against Corruption
• National Anti-Corruption Commission
• Fair Work Ombudsman
• Australian Tax Office; and
• Revenue NSW

As operating company on the Western Sydney Airport Metro project, Parklife Metro has now removed Future Form and all its downstream contractors.

In relation to the broader dispute, a Ministerial Direction has been issued to the independent board of Sydney Metro.

This will require that all future subcontracting is carried out under strict compliance prior to any settlement of claims on the project.

In a statement, NSW Transport Minister John Graham said that the government is committed to accountability.

“We will not tolerate any impropriety on our building sites, including such an important and generational project as Sydney Metro – Western Sydney Airport,” Graham said.

“The disturbing findings of investigator Max Kimber SC will now be put in the hands of the right agencies with the coercive powers to investigate this matter fully …

“… I have issued a Ministerial Direction which makes clear to the directors of Sydney Metro that the NSW Government expects this to be fixed.”

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