Kangaroo Island Council has secured full and final payment of outstanding debts, totalling $39,000, to the three island-based businesses which provided materials and services to the airport upgrade project material crushing contractor, NBS (Excavations) Pty Ltd.
The company placed themselves into voluntary liquidation on February 13, and the monies had been outstanding since that time.
The three businesses to secure funds were Hardy’s Quarry, Turner Fuels and Island Freight Services.
Council chief executive Andrew Boardman, said that all the documentation and processes for the procurement for the Department of Planning, Transport and Infrastructure (DPTI) pre-qualifiedcontractor was provided by the State Government for the Project Team to implement.
“However, having learned from the SA Water Kingscote Water Upgrade contract issues (BJ Jarrad entering receivership), council administration had investigated contractual inclusions that could assist in ensuring that sub-contractors and suppliers to main contractors were provided with an element of protection and surety of payment prior to paying principal contractor claims,” Mr Boardman said.
“Whilst not a perfect solution, our insistence that specific clauses pertaining to directors providing statutory declarations that all sub-contractor/supplier claims are paid up-to-date of principal contractor claim, does imply a personal liability on the directors of the principal contractor for false claim – not just corporate liability.
“This is critical and means that they could be pursued for criminal offence and compensation outside of the provisions of liquidation and corporate liability.”
With the debts now settled, the balance of funds for material and services provided by NBS to the project has now been able to be paid to the liquidator to finalise all matters between NBS and the council.
Mayor Peter Clements said it took time to negotiate a successful outcome with the council taking the lead to address key issues which could have affected the local community and businesses.
“We have since learned that variants of these learnings are now being applied in State Government head contracts,” Mr Clements said.
“Council wanted to see as many local businesses involved in the $18 million KI Airport Upgrade Project as possible.”
“We want the $18 million in funds to remain in and around our economy creating that additionality that is so important for us,” Mr Clements said.
“It was extremely upsetting and disruptive for all when NBS directors chose to take their business into voluntary liquidation not long after signing the contract.
“It has caused significant disruption and delay to the airside elements of the project.
“We look forward to the new airside facilities being available for the new QantasLink service commencing on December 4 from Adelaide to KI.”
“While not substantial by corporate measures, the $39,000 of debt they left owing to local businesses placed undue pressure on them and therefore, inevitably, on all of us.
“The measures that our CEO, as project manager, insisted upon being included in the contracts are an excellent example of our council being proactive and innovative in providing additional protection to council, our businesses and therefore our community as a whole.
“We are extremely pleased that we have been able to achieve this outcome for the businesses involved.
“Council is continuing to provide excellent probity and good governance of public funds.”
Mr Boardman, said the first phase of sealing the upgraded runway was in hand this week, and all airside elements of work are due to be completed by the end of this month.
“We can put the delays behind us, learn lessons from the issues that have arisen, and move forward,” Mr Boardman said.
“We look forward to the new airside facilities being available for the new QantasLink service commencing on December 4, 2017, from Adelaide to KI.
“We are grateful to REX, their ground handling agents, Airport Ground Services and our passengers for accommodating the disruption inevitable in any construction process.
“We are sure that the outcome will more than compensate once the new airport facilities are completed.”
For more information on the project visit the council's airport upgrade webpage at: kangarooislandcouncil.sa.gov.au.
Contact Andrew Boardman, on firstname.lastname@example.org or call 8553 4506.