Ostwald's unpaid contractors ask council for help

Kathie and Gerry McMullan of G. McMullan Contracting in Grafton are one of numerous subcontractors yet to be paid since the collapse of Ostwald Bros in August.
Kathie and Gerry McMullan of G. McMullan Contracting in Grafton are one of numerous subcontractors yet to be paid since the collapse of Ostwald Bros in August. Bill North

A LOCAL earthmoving company owner has called on Clarence Valley Council for help to recover around $7million owed to local businesses after the collapse of a major Pacific Highway upgrade contractor.

The owner of Valley Earthworks, Mark Mitchell, told the council on Tuesday the Queensland company, Ostwald Brothers, had gone into administration owing his company $132,000.

He said there were 23 local contractors waiting to be paid around $7million for work they did on the Woolgoolga to Ballina section of the highway.

Mr Mitchell was one of several deputations to the council meeting supporting a notice of motion from Cr Debrah Novak, which called on the council to support the sub contractors who lost money when the Toowoomba based Ostwald Brothers group of companies collapsed in August.

He described how under the delivery model agreed on for the project, Ostwald Brothers had won the contract to carry out soft-soil work on the project.

He said over a period of four months Ostwald's had not paid for earthmoving work under the terms agreed in the contract.

He said he had heard the same story from many other local contractors.

Mr Mitchell said the contractors needed to put pressure on the politicians in control of purse strings if they were to have any chance of success.

"I believe a letter of support would be very valuable," Mr Mitchell said. "We have a fighting group, they are local people.

"We are drifting around in the wilderness.

"The receivers are looking after the secured dollars. Basically everyone down here becomes an unsecured creditor."

He said it was important to keep up pressure on the politicians.

"The money will only come from politicians making decisions," he said. "(It will be) the minister saying the RMS has got something to answer for and didn't do their job, the due diligence around the undertakings they gave us at many meetings."

Mr Mitchell rubbished the politicians who claimed the contractors had not done due diligence.

"What a load of crap," he said. "How do you do due diligence if you've got to work two months and then you start to wait week after week after week for $50,000 from the first month to come?

"We waited two months, then started scaling it down and then in the fourth month we did $1900 worth of work, we scaled it down that quick.

"But we still got dudded for $132,000."

Later the council voted against Cr Novak's notice of motion, but supported a foreshadowed motion from Cr Richie Williamson which called on the council to write to the NSW Minister for Roads, the Members for Clarence Coffs Harbour, the Member for Page and the Sub-Contractors Alliance, the general manager of RMS Northern and the Federal Minister for Infrastructure calling for a timely resolution in dealing with the unpaid work for local sub contractors.

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