JavaScript disabled. Please enable JavaScript to use My News, My Clippings, My Comments and user settings.

If you have trouble accessing our login form below, you can go to our login page.

If you have trouble accessing our login form below, you can go to our login page.

Investigation into ASIO headquarter's impact on small business

Date

Larissa Nicholson and Hamish Boland-Rudder

The ASIO site in Russell has been plagued by delays and budget blowouts.

The ASIO site in Russell has been plagued by delays and budget blowouts. Photo: Graham Tidy

The federal small business advocate is investigating the impact on Canberra's building industry of the capital's new ASIO headquarters.

Two construction firms working on the project have called in administrators, citing money owed on the giant federal government job as a key factor in their financial woes.

The companies, Urban Contractors and Tread Lightly Earthmoving, owe millions between them to smaller contractors and businesses in Canberra and the region.

A spokeswoman for federal Small Business Commissioner Mark Brennan confirmed the problems surrounding the ASIO project had been referred to his office but would provide no details about what the commissioner could do for the stricken businesses.

"The matter has been brought to the Commissioner's attention," the spokeswoman said.

"As the Commissioner has not completed the examination, it is not appropriate to be commenting at this time on the issues involved."

The ASIO site in Russell has been plagued by delays and budget blowouts.

Construction costs have ballooned from $460 million to $633 million, and the spy agency is still months away from moving in.

Urban Contractors called in administrators in October last year, citing difficulties with its contract with lead contractor Bovis Lend Lease for work on the ASIO site as one of the primary causes its problems.

A report from administrator BCR Advisory found that Urban did not have the finance facilities and structure to cope with the working capital requirements of the Lend Lease contract.

Earlier this month, Queanbeyan company Tread Lightly Earthmoving, a key creditor of Urban Contractors, were also forced to call in administrators.

Both companies continued to trade as they sought a resolution with Lend Lease, but now, following the concerns of Tasmanian Greens Senator Peter Whish-Wilson, the Australian Small Business Commissioner has been called in to investigate.

Senator Whish-Wilson said the Commissioner may lack the appropriate authority to fully investigate the issue.

"We have some concerns, as do other people in the small business area, about the fact that his [the Commissioner's] role doesn't have any legislative powers," he told Fairfax Media.

"We were concerned that his intervention into this, as a broker essentially, to try to find a forward for these small businesses would be a lot easier if he had the ability to actually go to government departments and compel people to provide documents."

Senator Whish-Wilson, who said he had met some of the contractors, questioned how the situation got to this point, and why there wasn't more oversight of the Lend Lease contracts.

"A lot of these small guys, and this came from our direct meetings with them ... they can't afford to go to court, they're already bleeding from the loss of income and not being paid for contracts, the last thing they want to do is get involved with large lengthy legal disputes with government departments and large businesses," he said.

"These guys have just gone there in good faith and done their work, and suddenly they're not being paid and they're being told that the contractor's gone into receivership, but why; why if a big company like Lend Lease is involved and why if large government departments are involved? Surely someone must have been overseeing or should take responsibility for that," he said.

BCR Advisory's John Morgan, administrator of Urban Contractors, said the company had so far been able to trade its way out of trouble, but negotiations with Lend Lease on the deed of company arrangement were continuing.

5 comments so far

  • A lot of blames, but who is responsible?
    I do feel for the small business and subcontractors.

    Commenter
    Robilant
    Date and time
    Mon Apr 29 03:04:09 UTC 2013
    • For the same price as this misplaced Stalinist monstrosity, you could build the entire light rail from the City to Gungahlin.

      The Canberra community objected vehemently to it, and will never accept it, and it deserves every bit of bad luck that comes its way.

      Commenter
      Stephen
      Date and time
      Mon Apr 29 03:17:34 UTC 2013
      • Another government job, another round of businesses getting dudded.

        Commenter
        WotTha?????
        Date and time
        Mon Apr 29 03:46:12 UTC 2013
        • Ah yes, the "Stanlist monstrosity'. I can't help but feel yours and others anger is because of who will be using the building, rather than the building itself. Would we see the same level of indignation if the building was the International Museum for Tibetan Basket weaving?

          Commenter
          That Guy
          Location
          Canberra
          Date and time
          Mon Apr 29 05:16:19 UTC 2013
          • Somebody, somewhere, somehow, must be in charge of this colossus. Otherwise how would it get built - But who and where are they?????

            Commenter
            Tc
            Date and time
            Mon Apr 29 05:18:59 UTC 2013

            Make a comment

            You are logged in as [Logout]

            All information entered below may be published.

            Error: Please enter your screen name.

            Error: Your Screen Name must be less than 255 characters.

            Error: Your Location must be less than 255 characters.

            Error: Please enter your comment.

            Error: Your Message must be less than 300 words.

            Post to

            You need to have read and accepted the Conditions of Use.

            Thank you

            Your comment has been submitted for approval.

            Comments are moderated and are generally published if they are on-topic and not abusive.

            Related Coverage

            Featured advertisers

            Special offers

            Credit card, savings and loan rates by Mozo