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Legislative Assembly for the ACT: 2010 Week 3 Hansard (16 March) . . Page.. 876..


MS GALLAGHER (continuing):

they believe in our ability to deliver and to lead this community, particularly in difficult times, which we are in now in terms of our budget.

I should say that it is our budget that is having difficult times. Our economy, of course, is going very well; it is very strong. And that is good news for the ACT.

Opposition members interjecting—

MR SPEAKER: Order!

MS GALLAGHER: Mr Speaker, it is increasingly difficult, as the boys get more rowdy, to answer their questions. My mother taught me not to shout over the top of people, which I try very hard not to do. Occasionally I have to respond to others. But it is increasingly hard to answer a question when there are five—actually, si—xbooming voices coming at me constantly.

Akron

MS BRESNAN: My question is to the Minister for Territory and Municipal Services and relates to the collapsed company Akron. Minister, what changes will the government make to ensure that the problems associated with the collapse of Akron are not repeated?

MR STANHOPE: I thank Ms Bresnan for the question. The collapse of Akron certainly creates some very significant issues for subcontractors that were employed by Akron to deliver projects, some of which were projects in which the government, through the LDA, has an interest. The LDA did have rigorous processes in place in relation to payment. In relation to tendering for work, the LDA does of course ensure, through the procurement arrangements that apply in the ACT, the highest demands or standards of tenderers. From time to time—and this is one of those instances—despite a rigorous tendering process, despite tendering processes that represent best practice in relation to the identification and letting of contracts, it is the case, sadly so, that Akron, a major Australian company, a company that has been in existence for many decades and has its base in Victoria, at the time it experienced the difficulties it did with cash flow, had something in the order of 160 projects for which it was currently contracted, including two significant contracts in the ACT: one with the LDA at Bonner and one with the LDA in a joint partnership with CIC at Crace.

The contracts—and this is the case across the board—in which the LDA was directly involved were with Akron. Akron then subcontracted, as is the way. It is difficult for any contractor of services then to deal with perhaps some of the flow-on implications in relation to priority of payments of a company that is failing and unable to meet its debts. In the context of guaranteeing payment, it has to be understood and appreciated that in relation to Akron the LDA was seeking and receiving statutory declarations, formal legal instruments, in relation to which there is a legal consequence to not being honest in relation to payments. As a matter of course, the LDA was seeking and receiving statutory declarations. At this stage I have not had or received any advice in relation to whether or not any misleading statements or claims were made in any of those statutory declarations. That is perhaps another issue and not one that I would comment on here in any event.


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