Page 2771 - Week 10 - Tuesday, 14 August 1990
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In relation to Shelleys, the current contracts which could be considered critical are the Monaro Highway, the Theodore Primary School and the Tuggeranong transport and works depot. All of these were in existence at the time of the formation of this Government. They had all been managed by the previous Minister, Mrs Grassby. All efforts are being made by Public Works to resolve these and the other contracts on which Shelleys have defaulted, to enable the work to be completed as soon as possible and to ensure subcontractors suffer as little as possible.
One fact that is clear is that the ACT Government cannot be responsible for Shelley's debts to their subcontractors and suppliers, and to suggest that we are in some way responsible is clearly ludicrous. All contracts with the ACT Government had security deposits provided by Shelley's bank as unconditional guarantees. These guarantees have now been called in and they will be used by the Government to offset the extra cost of finishing those projects which remain to be finished.
Mr Acting Speaker, I think it would be fair to say that the ACT Government, the works department part of the Government, were aware of rumours about Shelleys and their financial viability. I think it should be pointed out that usually in the construction industry there are rumours floating around about all sorts of firms, particularly here in the ACT. It seems to be a place of rumours. I should note, though, that the firm was legally entitled to tender; it provided reasonable tender prices and it certainly did not win all the tenders that it went for. Many is the time other firms underquoted it and they were awarded tenders in preference to Shelley. Shelleys had a proven record of performance and it had provided substantial performance guarantees from one of the major banks. Frankly, Mr Acting Speaker, I believe it would have been quite irresponsible and indefensible for the ACT Government or the ACT administration to have excluded Shelleys from consideration, in the circumstances. If anything, that would have only hastened the demise of the firm and perhaps have left a number of people in an even worse position than they are now.
Mr Connolly presented the letter he tabled as if it was evidence in a treason case. The letter to the Shelley group stated that contractors should submit accounts for all work completed during the month, before payment is then handed on to it to be handed on to the subcontractors. He produced this letter as if it was a special requirement that was somehow put to Shelleys and Shelleys alone.
There are two types of work that are conducted within the public works area, Mr Connolly. One of them is where a firm contracts to perform a specific task - to build a road, to put in some sewerage works or whatever it may be. It provides a quote to do that and it is given the money and it goes out and does it and it arranges that however it wishes to do so.
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