Payments ‘accelerate’ weeks before Pindan collapse

CITY of Fremantle payments to Pindan accelerated in the weeks before the construction company collapsed on May 18, leaving out of pocket by up to $100 million hundreds of contractors on nearly 90 projects in WA including the $42 million Walyalup Civic Centre.
The City’s own monthly financial statements show that payments to Pindan under its 2018 contract increased in frequency from March 4 this year when it was paid $420,695, eight days after its February monthly payment of $1.28 million.
Another $991,796 was paid on March 23; $352,000 on April 9; and a final payment three weeks before its collapse of $876,122 on April 28 – a total of $2.64 million since Pindan’s payments switched in March this year from monthly to weekly and fortnightly withdrawals.
At full council tonight, South Ward Cr Marija Vujcic asked the CEO to explain why the payment arrangements were altered after March 4 and whether he or Acting Mayor Andrew Sullivan know of the change, which she said was ‘significant’.
“Did Pindan ask to accelerate payments?” she said. The CEO said he would reply to Cr Vujcic in writing.
According to CMFEU spokesman Simon Stokes, none of the extra money was paid to sub-contractors because the preferred contractor for the Kings Square civic centre already was late paying its contractors when it went into administration.
“I haven’t seen the contract, but as far as I know there would have been nothing in it to stipulate accelerating those payments. If both parties agree, then sure they can ask for that payment when they want,” he told StreetWise.
“If Pindan were as deep in the whole as it seems they were, that is owing up to 500 contractors up to $100 million, then there is zero chance that they believed themselves to be solvent up until the point they went into receivership.”
Mr Stokes said luckily the City had arranged and stipulated project bank accounts in the contract: “It looks like they can ensure payment through that system for most of the work. What they won’t be able to do is pay out contracts. if people still had contract work to do, then those contracts are dead.
“The Fremantle job at least is at a point where council could have it completed with a reasonable set of stand alone contracts for service provision. They can employ someone to finish the external panels and windows that are still not fitted.
“This job is not in as bad a state as many of the Pindan jobs, but it is still a cluster fuck and they should never have engaged Pindan which underquoted ProBuild by $10 million.”
StreetWise has sent questions to the CEO asking why the payments changed and whether Pindan asked it to change the contractual arrangements.
Ernst & Young administrator Sam Freeman has said directors of Pindan had been pursuing opportunities to bring in new investors in the months leading to its collapse: ”Over the course of the last few days, those investors withdrew from the process and accordingly they made an appointment.”