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QR negligent but not corrupt to pay wrong contractor: CCC

The CCC has found there was no corruption but signs of negligence in some of Queensland Rail's contract dealings.
The CCC has found there was no corruption but signs of negligence in some of Queensland Rail's contract dealings. David Stuart

THE Crime and Corruption Commission has found there had been negligence or failure to follow best practice in the procurement process that led to the transfer of Queensland Rail contracts it had with Walton Construction Queensland to Peloton Builders, in 2013.

However in a letter from CCC Commissioner A.J. McSporran to Nicklin Independent Peter Wellington he said evidence was not sufficient to suggest a knowing or reckless breach of trust.

Whistleblowers late last year met with the Integrity Commissioner Richard Bingham who subsequently found a prima facie case existed based on evidence presented to him.

Mr Wellington subsequently referred the matter to the CCC on December 14 to investigate.

Subcontractors who lost $30m in Queensland as part of the $70m demise of the Walton group of companies wanted clarity on the process that led QR to agree to the contracts being transferred and importantly why it paid Peloton for projects that had already been completed but not invoiced by Walton.

The result was Peloton which was owned by executives of Mawson, Walton's business adviser, received money that should have been available to liquidation and potential payment to the subcontractors who actually did the work.

Mr Wellington has now referred it on to the Ombudsman to investigate the conduct of the public servants involved.

He said he was concerned those involved had only been counselled about conduct which had significant implications for a lot of people affected by the Walton collapse.

"I hope the Ombudsman can clarify and probe staff as to whether there was anything further involved in the decision they made," he said.

In 2014 then Queensland Rail CEO Helen Gluer acknowledged the contracts had been exchanged in three business days on the strength of a phone call but said an internal inquiry had found QR had acted in good faith.

In its letter to Mr Wellington this week the CCC said its inquiries with QR revealed an external review of some of the procurement processes, so far as it related to the awarding of contracts to Walton and the subsequent transfer of those contracts to Peloton, was commissioned by Queensland Rail in 2014.

"In summary, the review found that the tendering processes were in accordance with procedures, although some shortcomings were identified in the procedures that meant that detailed inquiries regarding the 'restructure' of Waltons were not conducted," Mr McSporran wrote.

"The CCC has been advised that as a result of the review, procurement practices were revised and extensive staff training and awareness workshops were conducted."

Mr McSporran said the CCC had determined insufficient evidence existed to raise a suspicion of corrupt conduct for the allegations that Queensland Rail was complicit in the alleged phoenix activity and that payments for the work at Cleveland station were improperly made to Peloton.

He said there was an absence of evidence that the conduct occurred as alleged.

Subcontractors Alliance head Les Williams disputed the CCC's claims there was "no evidence that anyone at Queensland Rail knew of the connection between Walton and Peloton".

He said at the time Walton's sole director Craig Walton was the licenced builder to both companies and had met with QR to facilitate the process.

"The issue is the transmission of business from one company to the other and that QR paid Peloton as if both were the same," Mr Williams said.

"This led to Peloton being paid for work done by Walton subbies. QR had the means to assess the work done by Walton and owed to Walton and which could have been available to creditors as part of the liquidation but made a conscious decision to ignore it."

The CCC found there was no evidence that Queensland Rail knew that the transfer of contracts was not bona fide.

"The CCC appreciates the impact the Waltons collapse has had on subcontractors however, these matters are not matters the CCC can deal with for the above reasons," Mr McSporran wrote to Mr Wellington.

"If you have not done so already, you may like to contact Queensland Rail directly to discuss these matters or consider referring your concerns to the Queensland Ombudsman who is responsible for investigating maladministration, which seems more likely than corrupt conduct on the basis of the information available."

Topics:  crime and corruption commission ombudsman queensland rail subcontractors alliance walton


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