Saracen Properties says its $550 million Raine Square project will resume construction within a fortnight, after Salta Constructions told 250 workers to walk off the Murray Street site yesterday over a pay dispute.
Saracen Properties director Luke Saraceni told WA Business News the company had issued a notice to Salta Constructions to recommence work immediately, or risk being replaced as lead contractor.
"Our contingency plans are, under the contract, we can replace them and we will," Mr Saraceni said.
"I've never seen a builder in Perth ever adopt those sort of tactics to try and get variations.
"They normally go to arbitration, not put all the poor worker's lives at risk. That's the kamikaze pilot's approach."
Mr Saraceni said he expected the dispute to be resolved, or the contractor replaced, within a "couple of weeks."
"The builder's reasoning is he claims he is owed money from us and can't afford to pay them," he said.
"He is not owed money from us, we have a contract with him, and our contract is quite clear as to what's owed and what's not owed, and also has arbitration and dispute procedures and anything that we don't agree with should be going to arbitration and dispute.
"These guys are not interested in going to arbitration; they're interested in attempting to extort money from us in different ways."
Salta is understood to be seeking $80 million in variations to the $300 million Raine Square leadcontract.
Salta issued a statement today, which said the company had suspended work in accordance with the building contract, citing concerns relating to non payment of variations directed by Saracen.
"Salta will not continue to carry out works where there is a risk that it will receive its contractual entitlement," the statement said.
"Therefore it has acted to protect the interest of workers and sub-contractors.
"This action was taken following ongoing, rigorous attempts by Salta executives to negotiate a resolution of outstanding contractual matters to ensure payment of the full amount due."
Salta would continue to seek a resolution to the dispute with the aim of completing construction of Raine Square later this year, the statement said.
