News

Millions left owing by contractor

S&N has gone into administration.
S&N has gone into administration. Peter Holt

A WEST Australian-based company working on the Kestrel Mine Extension has gone in to administration after severely under-costing the project, leaving millions owed to Central Queensland subcontractors and trade businesses.

S&N Civil Constructions collapsed on April 11 but the warning bells were ringing long before that and KME owner Rio Tinto Coal refused to listen, according to one former Blackwater-based subcontractor.

The subbie claimed he had not been paid for four of the seven months he worked for S&N Civil on purchase orders and was out of pocket $280,000.

Another subcontractor was owed $2.6 million.

"The whole time they knew S&N Civil was going down, having money troubles, and Kestrel always said no matter what happens we will look after the subcontractors," the subbie said.

"The only reason I kept working was Rio kept saying 'We will pay you out, we will look after you'. Basically, it hasn't happened.

"I'm originally from Blackwater and I have been in the mines all my life. When I got the (nine-month) contract for KME I thought I'd come back to the area.

"I've been paying off my two machines, I've got a little one in school, got a wife, I'm looking after my parents and renting a house in Emerald for $600 a week and in another couple of weeks we will have to move out.

"There's Shepton Quarry and lots of businesses in Emerald also owed money by S&N Civil as well."

Rio Tinto is on the list of S&N creditors, claiming $21 million.

The KME has already blown out to more than $2 billion, double its original estimate, but remains scheduled for completion in 2013.

A Rio Tinto spokesman said the company was working to minimise any disruption to the KME from S&N Civil's demise.

"This is a difficult situation for all involved and it is regrettable that subcontractors have been impacted in this way," the spokesman said.

"However, it is important to recognise Rio Tinto has made significant and all payments required to S&N for the work carried out.

"S&N is in turn responsible for paying its employees and subcontractors."

Ferrier and Hodgson partners Martin Jones and Darren Weaver were appointed as joint voluntary administrators to S&N Civil on April 11.

The administrators described the KME as the "unprofitable contract" that could have tipped the company's financial fortunes.

The subcontractor said he believed S&N had about 140 workers who had been paid, but were still chasing up unpaid superannuation.

"They're still owed holidays too. It's around $10,000 each person plus super," he said.

"Rio has annoyed me the most... I moved to Emerald for this job and they knew what was going down.

"They had numerous complaints and nothing was done.

"I will lose my machines, everything I have worked for.

"I have until mid-June to make the payments. If I don't get any money, I have nowhere to go."


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