Wednesday, 30 August 2023

Adjournment

Enver ERDOGAN (Northern Metropolitan – Minister for Corrections, Minister for Youth Justice, Minister for Victim Support) (17:47): I move:

That the house do now adjourn.

North-east rail line

Wendy LOVELL (Northern Victoria) (17:47): (435) My adjournment matter is directed to the Minister for Transport and Infrastructure and concerns the liquidation of Exel Infragroup Pty Ltd, the lead contractor of the Victorian government’s north-east line upgrade project. In the wake of the liquidation of Exel Infragroup, which has left many subcontractors unpaid for work on the north-east line upgrade, the action that I seek is for the minister to intervene and fund the full payment of all outstanding money owed to subcontractors for work on the state government’s north-east line upgrade to ensure subcontractors have confidence to participate in future government projects.

The north-east line upgrade project is a project to upgrade the rail line to allow VLocity trains to run between Melbourne and Albury. Exel Infragroup Pty Ltd is a civil excavation business that was the lead contractor for several parts of the project, including line upgrades at places such as Lilliput and Balmattum in my electorate. On 14 July Exel Infragroup went into liquidation, with the company owing money to several subcontractors who had completed work on the project. I have spoken with two subcontractors based in my electorate who are owed substantial money from the liquidated company. Synergy Traffic Management is a small Shepparton business that is owed $63,000 for completed work on the north-east line upgrade project. Along with the money owed, this company spent many thousands of dollars on training staff for an expected two more years of work on the project. CountryWide Asphalt in Wodonga is out of pocket more than $378,000 for completed work on the project – a significant amount that impacts on its ability to meet its own financial obligations.

It is unacceptable for the government to wipe their hands of responsibility to subcontractors by saying that Exel Infragroup was paid in full for work on the north-east line when the government’s own ministerial directions for public construction procurement, which prescribe the procedures that Victorian government departments and public bodies must follow when they procure public construction works, require proof from a contractor that all subcontractors have been paid. Ministerial direction 7.2.4, headed ‘Subcontracting’, reads:

Contracts must contain appropriate mechanisms to ensure that:

…

(c) the Contractor demonstrates proof of payment to subcontractors and suppliers.

So why was the final payment made to Exel Infragroup when it obviously had not paid its subcontractors, and why weren’t the directions adhered to? The minister is ultimately responsible for this mess, and clearly the ministerial directions have been breached, so I call on the minister to ensure subcontractors are paid in full immediately.