The damage to ratepayers’ pockets from construction company Shearer Contracting going into voluntary administration is still unknown, says Dubbo mayor Ben Shields.
Earlier in the month the company went into administration while constructing a roundabout and road extension on Boundary Road. When completed the project will see Boundary Road linked from Wheelers Lane through to Sheraton Road and will facilitate access to Keswick and Southlakes estates.
At the Monday night council meeting it was determined council staff would take over the construction.
“It’s always the case when we do works like this that we do go to tender and what we do do is we test our own capacity against the private marketplace. In this case we got someone who came in at a good price and effectively they’ve gone into voluntary administration. So now the best thing is for us to take over it and get it done as soon as possible and with as least disruption as possible,” Cr Shields said.
Council staff will restart the work on Monday, April 23.
“I’m not going to lie, there’s certainly going to be a knock-on effect when it comes to other projects in the city, hopefully that will be a minimum but what we can do up at Boundary Road is bring in sub-contractors. So yes, council staff are taking over a lot of the work but also there’s nothing stopping us getting sub-contractors in to do some of those minor jobs,” Cr Shields said.
At this early stage the financial impact to council of Shearer Contracting going into voluntary administration was yet to be seen, the mayor said.
“So far we’re sort of feeling around blind because we don’t know the full implications of it yet but the things we are certain of is it could have been a hell of a lot worse and lucky we didn’t write a cheque at the start for the whole of the job,” Cr Shields said.
Cr Shields said council had been paying Shearer Contracting in monthly installments.
The outcome of the Boundary Road work would not change the way council awarded tenders in the future, the mayor said.
“It’s always the case at the end of the day there’s a points-based system when you’re doing tenders. You award points based on cost effectivenesss, so if you’ve got Firm A and Firm B, Firm A might offer the cheapest cost but firm B might win more points based on having better workmanship or better financial reserves so it’s up to the councillors of the day and the staff of the day to put the right point system in,” Cr Shields said.
“We award contracts and tenders almost each and every council meeting. This is the first one in many, many years where we’ve had a bankruptcy so most of the time we’ve got it right. It does happen in business, it’s happened to state agencies in the last couple of years and as sure as the sun will rise tomorrow, it’ll probably happen to Dubbo council somewhere in the future as well.”
Cr Shields said he hoped there would be minimal delay to the completion of the work. The project was initially scheduled to be completed in July and Cr Shields said he hoped there would be no more than an extra two weeks added to the finished date.