Canberra subcontractors have sought assurances from healthcare giant Bupa to guarantee payment for work completed on a southside aged care facility.
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A peak body that represents subcontractors says some Canberra businesses are collectively owed hundreds of thousands of dollars in certified claims by builders Denham Constructions.
But the company said payments would be made once defective work had been fixed.
Bupa confirmed it was aware of discussions between the builder and subcontractors, but said the disputes related to contracts it was not party to.
The Denham Constructions website lists the Stirling project as worth $22 million, and involves the construction of a two-storey, 144-bed residential aged care facility, including dementia care.
"The new two-storey facility will include commercial kitchen and laundry facilities, two passenger lifts, serveries and dining rooms, various lounge areas, landscaped forecourt areas and external car parking," the website says.
Subcontractors' Alliance spokesman Les Williams said Canberra businesses, in a variety of trades, that are owed money for work on the project had urged Bupa to take action against Denham Constructions in a bid to secure payment.
Correspondence with Bupa, shown to Fairfax Media, show the international healthcare group had been told that the builder had set up a shelf company, Denham Construction Project Company 940 Pty Ltd, to engage subcontractors.
Businesses feared this company could then be folded and they would be left out of pocket.
Subcontractors asked Bupa to not release further funds to the builder and the money instead be used to directly pay businesses that had been put under financial stress as a result of the disputes.
Mr Williams said he believed Bupa had made verbal assurances to the trades that they would be paid.
"I believe that some of these subcontractors have continued to work on this site because of assurances given by Bupa," Mr Williams said.
"One of the concerns that we have is that subcontractors are very reticent to comment for fear of reprisal from construction companies and industry groups.
"They are sometimes even threatened not to use the dispute resolution system."
Denham Constructions chief executive Steve McGrath said there had been disputes over defective work.
"There is no outstanding amounts due that won't be paid in the strict terms of the contract between the contracting parties," Mr McGrath said.
"CHD is in dispute for defective work. However, they are working to rectify and payment will be paid in full on completion."
Bupa said it was aware the builder had been in discussion with some subcontractors, but that it related agreements between Denham Constructions and third parties.
"As far as Bupa is concerned, when we enter contracts we have stringent solvency and other assessments in place," Bupa said.
"Because we want to ensure fair and reasonable claims are paid in a timely manner, we also have arrangements with Denham to provide evidence of payments."
