SUBCONTRACTORS in Gladstone are being pushed to the brink of ruin as a major company has fallen behind on millions of dollars in payments.
AJ Lucas, a major engineering and infrastructure company, has been contracted by Gladstone Area Water Board (GAWB) for a project to construct water and sewerage pipelines from the mainland to the LNG projects on Curtis Island.
Contractors and sub-contractors in Gladstone claim AJ Lucas has fallen behind on payments for work done as far back as January.
The Observer understands AJ Lucas owes a sum of money in overdue payments - amounting in the millions - to contractors working on the project.
The Observer yesterday spoke to several contractors, all of them small businesses, who fear their businesses are on the verge of being wiped out if AJ Lucas fails to make full payments soon.
Most contractors declined to be named.
AJ Lucas did not answer most of the questions asked by The Observer yesterday, but a spokeswoman said the matter would be resolved within the next week.
"AJ Lucas is aware of the concerns of subcontractors and is liaising with many of them on a daily basis," she said. "All contractors will receive monies owed. While we can't disclose details surrounding the situation due to commercial confidence, we can confirm we are working closely with the client to resolve the situation, and this should be finalised within the next week."
Some contractors, including John Ingham, owner of KJ Ingham Water Trucks, said the State Government needed to find a solution to ensure subcontractors were not left unpaid, especially since GAWB is a government-owned corporation.
He said the situation was hurting small businesses and families and GAWB had a "duty of care" to subcontractors working on its projects.
Mr Ingham, who on legal advice did not say how much money he was owed, said he has employee, as well as four subcontractors working under him. He is now desperately worried about meeting his financial commitments to them.
The Observer was made aware that Barlow Civil, a Gladstone-based earthworks and pipeline business contracted by AJ Lucas for a large amount of work on the project, held an emergencey meeting with its staff yesterday morning.
Barlow Civil declined to comment.
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