Builder’s $500k deal over Bendigo hospital 

One of Australia’s biggest builders, Lend Lease, offered to pay up to $500,000 for any breaches of state government rules in a desperate bid to not be excluded from all publicly funded work in Victoria.

Evidence tendered in the Federal Court yesterday also revealed that senior executives at Lend Lease offered to excise Victoria from a workplace deal with the Construction, Forestry, Mining and Energy Union and replace it will a new, less union-friendly, deal.

But that move would have required agreement from the union – which has not been forthcoming – and the head of the government’s Construction Code Compliance Unit, Nigel Hadgkiss, repeatedly rejected attempts from Lend Lease to compromise.

The flurry of correspondence between the government and Lend Lease came shortly after The Age revealed last October that Lend Lease was set to be banned for its deal with the CFMEU that placed restrictions on the use of outside labour and required the flying of union flags.

Under state government rules, that took effect in July 2012, any builders that sign union-friendly deals risk being prevented from bidding for publicly funded work.

The court case, brought by the CFMEU, largely deals with the tender for the $630 million Bendigo Hospital project, where Lend Lease is part of one of the two consortia bidding for the project.

It formally remains in the running despite being banned by the government in late 2012 for up to four years. As part of the case the government has given undertakings to not exclude Lend Lease until mid-April, delaying the start of the project by up to four months.

The court also heard that a steering committee ranked the Lend Lease bid well ahead of its rival, except on industrial relations.

Evidence also emerged of tension within the public sector over the issue with Department of Health  project director Anthony Lubofsky apologising in an email to Construction Code Compliance Unit assistant director Cathy Cato for getting “a bit heated’’.

Mr Lubofsky told Ms Cato that  the government’s code was just one factor out of 27 criteria in the tender for the Bendigo Hospital. He noted that concerns about the way the process had been handled could result in legal action.

 The trial, which continues today, is the major test of the government’s crackdown on building unions and its bid to control rising construction costs on big projects.

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