A day after the WA government gave Perth’s new children’s hospital a start date, head contractor John Holland has been slammed over tens of millions of dollars in alleged late and non-payments owed to the subcontractors building it.
An Auditor General report this week was critical of the process in which the WA government failed to confirm that John Holland was actually paying subcontractors.
The project is delayed more than a year and has been marred by allegations that John Holland owes tens of millions of dollars to subcontractors.
The most notorious case being well-known Perth businessman Ross McGinn who took his own life last year.
His son Ross said at the time that was due to the stress of laying off workers from his Acrow Ceiling business because he was owed $2 million and had a $100,000-plus a week payroll.
CFMEU WA state secretary Mick Buchan said 101 workers involved in union industrial action at the hospital in 2013 were facing charges in court next week for "trying to fix the issues at the hospital".
New laws were needed to make company directors accountable, he said.
"In the last ten years, more than one in five of all insolvencies have occurred in the construction industry and the toll is huge," he said.
"Unsecured creditors such as smaller subcontractors and their employees bear the brunt of corporate misbehaviour."
The auditor general told Treasury to strengthen its requirements from John Holland, including better informing it about non-payment disputes because they had so far been inaccurate.
WA Health Minister John Day defended John Holland, saying senior managers had given him and Treasurer Mike Nahan assurances that it would treat subcontractors fairly and he had seen them do that.
The CFMEU and six officials were fined more than $21,000 two weeks ago over a protest at the $80 million Perth airport expansion, also involving unpaid wages partly involving John Holland's parent company Leighton. John Holland were contacted for comment.
PROBLEMS AT PERTH'S NEW CHILDREN'S HOSPITAL
- Auditor general tells WA government that builder John Holland must be better monitored over payment disputes with subcontractors.
- State government says 1500 green decorative facade panels must be replaced.
- *Auditor general says he is investigating complaints from sub-contractors who haven't been paid.
- More than 900 door frames are found to not comply with Australian standards and must be replaced.
- Close to half a kilometre of faulty water piping is ripped up and replaced.
- The original opening date for the hospital.