THE state government will begin negotiations with contractors for the Newcastle inner-city bypass’s $133million Shortland to Sandgate section after severing ties with troubled building company Reed Constructions.
NSW Roads Minister Duncan Gay announced yesterday that the Roads and Maritime Services had ended its contractual arrangements with Reed following estimates the bypass was more than six months behind schedule and revelations the contractor could owe companies working on the project as much as $10million.
The Newcastle Herald reported this month that the state government had given Reed 10 days to prove it could finish the bypass and three other major road projects across the state.
Mr Gay said the state government had been working with Reed since it indicated in February that it was experiencing financial difficulties, but the priority now was for these four important road projects to be completed as soon as possible.
“It’s not appropriate for the government to use taxpayers’ money to simply bail out a company experiencing financial difficulties,” he said.