Omega Construction, the company contracted to build 10 bridges for the second stage of the $1.12 billion NorthLink project, faces an uncertain future after the joint venture building the road link yesterday terminated its contract.
The company is working through its options with administration a likely outcome.
BGC Contracting and Laing O’Rourke’s joint venture Great Northern Connect subcontracted Omega to build bridges on the project which will link Morley to Muchea.
However, Omega, which has in turn subcontracted work to four other subcontractors and had a total of 40 people working on the bridges, has experienced financial difficulties.
It is understood that it was about two-thirds of the way through its $3 million contract and had told head contractors BGC Contracting and Laing O’Rourke it had encountered issues on the project that were not apparent at the time it tendered.
Omega director Ivan Ivandich said he could not sign a statutory declaration that he would make 100 per cent payments to his subcontractors for their September payments. As a result, the joint venture had not paid Omega.
“The September invoice (to joint venture Great Northern Connect) has not been paid,” Mr Ivandich told thewest.com.au.
It is not clear how much or even whether the four Omega subcontractors will be paid. Some are believed to be owed hundreds of thousands of dollars.
Subcontractors WA’s Louise Stewart said the news was more evidence that the McGowan Government needed to enact protections for subcontractors’ pay that it had promised at the last election.
She said she expected deemed statutory trusts, designed to protect money intended to pay for subcontracted work, would be rolled out across the country and that WA would adopt legislation like that in other States that provides “fairer treatment for subcontractors”.
Mr Ivandich said: “We have got someone in to help us work this through and we will have a better idea of what’s going on next week.”
BGC Contracting and Laing O’Rourke were awarded the $417 million construction contract to build a 17km link that covers the central section of the Swan Valley bypass between Reid Highway and Ellenbrook in January last year.
Once finished, the Northlink will provide a continuous connection from Perth Airport to Muchea.