THE Shortland to Sandgate section of the Newcastle bypass is at least six months behind schedule because of problems with head contractor Reed Constructions, the state government has confirmed.
And the government has given Reed just 10 days to prove it can finish the bypass and other road projects across the state.
Finance Minister Greg Pearce said yesterday that if Reed could not prove its financial viability, the government could be forced to make ‘‘alternative arrangements’’ to finish Reed’s projects.
Mr Pearce said an expert panel established in February had been examining Reed’s financial situation and was expected to report to the government by May 21.
A spokesperson for Roads and Maritime Services said the Shortland to Sandgate stage of the bypass was expected to cost about $133 million.
Reed’s contract with the government was worth about $65 million and about $30 million worth of work had been done so far.
The road had been scheduled to open late next year.
‘‘But even if work was able to restart in the next few weeks it is expected at least another six months would need to be added to the project completion date,’’ the spokesperson said.
Wallsend MP Sonia Hornery said the delay was regrettable, especially when the final section of the bypass, between John Hunter Hospital and Jesmond, was still up in the air.
‘‘We need to get this Shortland to Sandgate section finished so they can go back to planning on the final missing section of the full Newcastle bypass,’’ Ms Hornery said.
Reed’s financial problems were made public in March when the state opposition said the company was on the verge of financial collapse.
The Construction, Forestry, Mining and Energy Union said that millions of dollars were owed to Reed’s subcontractors.
Yesterday, the roads spokesperson said the government had ‘‘received complaints from a number of Reed’s subcontractors who are owed money [but] the details of payments and money owed is a matter between Reed and its subcontractors’’.
Reed Constructions was started in 1979 by managing director Geoff Reed.
It was announced as head contractor on the bypass project in February 2011.