AIRPORT upgrade sub-contractors left out-of-pocket after the collapse of Hewatt Earthworks must recover costs from the company’s administrator, according to Orange City Council.
A sub-contractor, who asked not to be named for legal reasons, contacted the Central Western Daily alleging the council had withheld a payment from Hewatt when it entered voluntary administration in May, but had not passed it on to the 12 sub-contractors once new agreements were signed.
Council technical services director Chris Devitt said the council had made several payments to Hewatt for work carried out, but confirmed one payment of about $700,000 had been withheld pending completion of the project.
“There were a number of unexpected legal and other costs incurred by Orange City Council when Hewatt went into voluntary administration,” he said.
“These included the costs of setting up the project to run under the direct supervision of the council and employing additional resources to manage the project.
“The council is entitled to offset any of these expenses against any outstanding payments owed to the administrators as they are additional costs incurred by the council as a direct result of the Hewatt collapse.”
Mr Devitt said the best way of assisting the sub-contractors was to re-start the project quickly and debts owed prior to the collapse were matters for the administrator, PPB Advisory.
“When all the contractors went back to work on the airport earthworks project they acknowledged their former Hewatt debts were in the hands of the administrators and not a matter for Orange City Council,” he said.
“Once the project has been completed and these costs are known, the council will consider how much of the payment that has been withheld can be made available to the administrators.”
Mr Devitt said the airport earthworks contract was only one of several projects Hewatt was working on and any funds paid to the administrator would be shared between creditors from each of those projects, not just contractors in Orange.
The airport terminal building remains the responsibility of a separate contractor and was unaffected by the Hewatt collapse.
Orange City Council has called for quotes from cafe and cleaning company operators interested in taking up those contracts once the terminal is complete.