BALLARAT businesses stand to lose millions of dollars after the company in charge of the Ararat Prison expansion went bust yesterday.
And the state government says it will not foot the bill to help the construction firm out of liquidation.
St Hilliers Construction Pty Ltd went into liquidation yesterday morning, leaving a number of Ballarat companies unaware if they will receive any portion of the millions of dollars they are owed.
At least five Ballarat-based companies are believed to have been left in the lurch, some of which are owed as much as $500,000.
It is not yet known if the companies will receive any of the money that is owed to them and Premier Ted Baillieu declared yesterday it was not the government’s position to bail the company out.
In a statement, St Hilliers said negotiations for a $150 million bail out from the government, Ararat Prison equity investors, and its bankers, had failed.
Peter Steenhuis, owner of Ballarat-based concreting company PM Builders, said he had found himself almost $200,000 out of pocket.
He said he went to the Ararat site yesterday morning to retrieve the equipment he had hired, only to be told he could not access it.
Mr Steenhuis, who employs 10 workers, fears he may have to lay some of them off.
“There was security at the gate so we had to talk our way around to just to get our own equipment. We managed to get away with it in the end,” he said.
“We were told there were no worries. It’s a bit of a joke. The small subbies (sub-contractors) like us are the ones that are going to get hammered.”
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Another Ballarat business, which had been working on the project since February last year, said it was looking at losing almost half a million dollars that was owed to it.
“We only had about one month of work to go but now we don’t know if we are going to get any money back at all,” said the company’s owner, who wished to remain anonymous.
Some companies walked off the site and took their equipment home last week, amid rumours a collapse was imminent.
The Construction, Forestry, Mining and Energy Union’s Victorian state secretary Bill Oliver has blamed poor management by the state government, who he claimed had been aware of the problems for months.
“This has not come out of the blue. The government have known about this issue for six months, since St Hilliers raised concerns in December 2011.”
A government spokesperson for the Department of Justice said discussions were underway to ensure the project would be completed and that workers received their full entitlements.
The project, worth $350 million, was commissioned in 2010.
A mass meeting of sub-contractors is planned in Ararat this afternoon.