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    Call for Kell & Rigby collapse inquiry

    Author: AAP
    Tuesday 21st February 2012

    Thousands of jobs could be lost in a "domino effect" stemming from the collapse of NSW building company Kell & Rigby, a union says.

    Creditors revealed on Tuesday that the construction firm had gone into receivership owing more than $35 million to about 500 businesses, the Construction Forestry Mining and Energy Union (CFMEU) says.

    Kell & Rigby was forced to close its doors earlier in February, initially sparking fears for 500 jobs at projects in NSW, Queensland and the ACT.

    CFMEU NSW Secretary Brian Parker says the number of jobs at risk is actually much higher, with thousands of subcontractors and suppliers owed money.

    "With more than 500 small businesses affected, the domino effect of this collapse could see thousands of jobs at risk," Mr Parker said in a statement on Tuesday.

    "This is the tip of the iceberg as many sub-contractors and suppliers are only now coming to terms with the impact of the losses."

    The CFMEU has met with a window supplier that faces collapse and a cleaning company owed more than $100,000 that is also in a precarious position, he said.

    Mr Parker has called on the NSW government to launch an inquiry into the collapse focusing on Security of Payments legislation and government construction jobs that continue to use sham contractors.

    "We need a system that guarantees principal contractors cannot touch money that is owed to subcontractors and suppliers," he said.

    "The state government also needs to clean up its act and start leading from the front on this issue."

    "Right now there are government construction jobs where dodgy subcontractors that are failing to pay workers basic entitlements such as the award rate, superannuation and workers compensation are undercutting legitimate companies," he said.

    Since being appointed administrator on February 10, PPB Advisory has advertised Kell & Rigby's existing contracts to builders who might be prepared to take them on.

    However, administrator Mark Robinson said 18 of the 26 ongoing contracts appeared not to be profitable and were unlikely to be picked up.

    "Only about eight have profit left in the remaining portion of the contract,' he told AAP.

    "We would expect interest in those contracts."

    "There might be a white knight out there that's willing to throw a blanket over the whole lot, but we certainly haven't been put on notice of one yet."

    Mr Robinson said any investment would go towards easing the financial loss of sub contractors and creditors.

    "We don't expect there to be a huge return of funds to the company," he said.

    "It's more about mitigating the loss for those particular sub contractors, other creditors and workers that are attached to those contracts to enable them to recoup their losses if those contracts are picked up."

    Mr Robinson said approximately 30 interested parties had come forward, of which 17 have subsequently conducted detailed due diligence.

    "We hope to be able by the end of this week to introduce the best credentialled parties to the clients, and hopefully they will decide to run forward with the existing contracts."

    Tags: Kell
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    Based on information provided by and with the permission of the Western Australian Land Information Authority (2015) trading as Landgate.