BALLARAT businesses stand to lose millions of dollars after the company in charge of building the Ararat Prison went bust this morning.
St Hilliers Ararat Pty Ltd and St Hilliers Construction Pty Ltd have both gone into liquidation, 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, as St Hilliers appointed an administrator because it could no longer pay its debts brought upon by the prison.
In a statement, the company said negotiations for a $150 million bail out from the government, Ararat Prison equity investors, and its bankers, had failed
One Ballarat business, who 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 due to confidentiality agreements.
"We were told last week everything was fine and that we would be okay, but then this happened. We've got about 25 workers and we don't know if we will be able to keep them in jobs."
Another smaller sized contractor said it also feared it would not get any of the $200,000 it was owed.
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Some even walked off the jobsite and took their equipment home last week.
The Construction, Forestry, Mining and Energy Union's (CFMEU) Victorian state secretary Bill Oliver blames poor management by the state government.
"The government have failed to reach an agreement on financing this project and they have failed thousands of contractors and workers, both in Victoria primarily and now around Australia," he said.
"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."
Mr Oliver said the government sourced materials from China which didn't work.
The project alone is worth $350 million and was commissioned in 2010 by the Brumby Government.