Dave Gibbs from Gibbs Earthmoving at Diddillibah was left owed almost $900,000 after the Walton Construction collapse. Photo: Brett Wortman / Sunshine Coast Daily
Dave Gibbs from Gibbs Earthmoving at Diddillibah was left owed almost $900,000 after the Walton Construction collapse. Photo: Brett Wortman / Sunshine Coast Daily Brett Wortman

Queensland Rail contract transfers under scrutiny

THE Palaszczuk government will ask the Integrity Commissioner to examine the transfer by Queensland Rail in 2013 of eight construction contracts to the phoenix company Peloton from failed builder Walton, in the days before its collapse.

A spokesperson for Transport Minister Stirling Hinchliffe said the matters would be referred to Integrity Commissioner Richard Bingham for advice.

The contract transfer has never been fully explained.

There appears no evidence that a tender review was conducted in advance of the rushed transfer nor any rigorous assessment undertaken of Peloton's financial standing or capacity to deliver.

Walton Queensland went into administration a day after the contract transfer and was subsequently liquidated along with its parent company Walton Construction with debts totalling more than $70 million.

At the time Walton was running six weeks late on work for Queensland Rail.

In March, 2014, former Queensland Rail CEO Helen Gluer said the transaction had been the subject of an "independent" review immediately after the issues associated with the two companies were brought to her attention on February 28, 2014.

The review she said had "indicated that Queensland Rail had acted in good faith based on information provided to it by Walton Queensland".

The contract transfer formed part of a complicated set of arrangements contained within an asset sale agreement signed between Walton and Peloton.

Peloton's directors were also the directors of the Mawson Group, business advisors recommended to Walton's sole director by his banker NAB as it sought in early 2013 to retrieve $20 million in exposure.

Walton Queensland closed the doors to its Brisbane headquarters on October 3, 2013, and re-opened the next day in the same premises as Peloton.

The building in Montpelier Rd, Bowen Hills, was owned by the LNP fundraising entity Altum.

Ms Gluer and former Queensland Rail chairman Michael Klup resigned last week in the fallout from the train driver shortage exposed with the opening of the Redcliffe rail line.

In August, 2013, the then Newman LNP government over-ruled the Queensland Rail board and appointed its former chairman Glen Dawe as CEO on an annual salary package of $500,000.

Mr Dawe, who had been brought out of retirement in 2012 to chair the organisation, had resigned that position the previous month.

The government interference was followed by the resignation of board members Merren McArthur and Dawson Petrie who were replaced by Mr Klug, who became chairman, and former Labor minister John Mickel.

Mr Dawe resigned five months later in January, 2014, citing the need to attend to personal matters.

In 2011 Walton secured four small Queensland government contracts, two of which were with Queensland Rail. In total over a 26-month period the company won six government contracts, three from Queensland Rail.

Between March 2012 when the LNP took government until August, 2013, it won a further 11 contracts, eight of which were with QR.

During that period the business was under intense pressure with a Deloitte report in March, 2013, determining the company was relying on subcontractor retentions to survive.

Since mid-2012 the company's NAB account had been under the scrutiny of the bank's Strategic Banking Services division which specialised in insolvency and bankruptcy education.

At that time it was granted several extensions to meet the financial reporting requirements of its Queensland Building and Construction Commission licence.

Walton Queensland renewed the Altum Montpelier Road lease for three years in 2011.