TOXIC TRUTH: Cleaning up with $33m in fees

OLD SMELTER: Boolaroo,   more than a decade ago, with Pasminco in the background.
OLD SMELTER: Boolaroo, more than a decade ago, with Pasminco in the background.

  THE company employed to clean up the old Pasminco smelter site and claw back cash for creditors has pocketed more than $33million in fees.

 Ferrier Hodgson, responsible for the controversial Lead Abatement Strategy designed to address pollution in Boolaroo, Speers Point and Argenton, was appointed administrator in September 2001 when Pasminco collapsed under a mountain of debt.

The Melbourne-based insolvency specialist’s fees include charging $190 an hour for a ‘‘junior accountant’’, described as studying accountancy part-time at university.

Ferrier Hodgson partner Peter McCluskey’s fee is $595 an hour and the ‘‘administration supervisor/assistant’’ is charged out at $135 an hour.

Reports prepared by the administrator for creditors in January last year revealed the company’s fee structure and progress of remediation at the Cockle Creek site.

According to the documents, the company was paid $32.4million to January 2014 and was expecting a further $846,641 last year.

That equates to about $2.55million a year, or more than $49,000 a week.

Ferrier Hodgson’s spokeswoman said all fees were pre-approved by Pasminco’s creditors. The administrator has taken on the role of property developer at the old smelter site in a bid to maximise returns for Pasminco’s 39 creditors, finance companies owed $2.6billion.

Ferrier Hodgson told the Newcastle Herald last year  remediation of the site was almost complete and Pasminco’s creditors would get 22¢ in the dollar, or about $670million.

Boolaroo Action Group spokesman Jim Sullivan said it was ‘‘outrageous’’ the creditors walk away with $670million, Ferrier Hodgson with $33million in fees and the residents get polluted properties.

 Mr Sullivan said while the community was ‘‘extremely pleased’’ the old smelter site had been remediated, the abatement works in surrounding suburbs had done ‘‘almost nothing’’ to address serious heavy metal pollution that threatens residents’ health.

He said the whole process was designed to assist everyone, except the people living around the former zinc and lead smelter.

‘‘It has all been structured to benefit the administrator and banks at the expense of ordinary people who own residential properties around the smelter,’’ he said.

‘‘They won’t even tell us how much has been spent on the abatement works in the community and that’s because it was extremely little, or close to nothing.’’

 The former smelter site has been remediated to the Australian standard for lead in soil of 300 parts per million, but a joint Herald-Macquarie University investigation found lead in soil at 4230 parts per million at a home in the next street.

Lead experts said exposure to the contaminated soil and dust could cause sickness, brain damage, behavioural problems and lower children’s IQs.

 The Herald reported in December that it would cost up to $80,000 to remediate some properties, a cost to be met by the home owners.

 ‘‘There is no fairness in any of this,’’ Mr Sullivan said. ‘‘The residents have been completely dudded throughout the whole process.’’