Aggrieved: Bates Pipes’ Ben Bates.
By John Van Klaveren
CITY of Greater Geelong reneged on a $120,000 deal with four Corio manufacturers then tried to “blackmail” them, the companies have told the Independent.
They said the City broke a promise to reduce the costs of a special charge scheme in return for the manufacturers withdrawing their initial objections.
City officers then threatened to levy extra charges if the companies failed to pay the full amounts, they said.
“This was never mentioned before in the scheme, which amounts to blackmail,” the four wrote in a letter to the City.
Bates Pipes, Thornton Engineering, Geelong Galvanising and Lara Wreckers and Car Sales collectively wrote to the City objecting to the assessment.
Bob Bates said the deal was negotiated at a meeting with City chief executive officer Stephen Griffin and other officers.
The agreement amounted to a verbal contract, so the four businesses refused to pay the outstanding amounts, Mr Bates said.
The battle erupted over a special charge scheme to construct O’Briens Rd, Corio, and associated drainage works.
Mr Bates said the road offered little benefit to the businesses but plenty to the City’s Geelong Ring Road Employment Precinct.
“Council told us they were applying for a $2 million State Government grant but if we objected they would miss out on it,” Mr Bates said.
“If we did not object we would receive a large part of that grant as a reduction of our costs.
“The City said we would also benefit from any saving in the tender process once construction was completed and we would have six months interest free to pay.
“The project did come in under budget but those cost savings have been retained by council instead of being passed on to us, as promised.”
Mr Bates said the City never replied to the letter, sent three months ago.
“This is an abysmal and disgusting way to treat local manufacturers. Together we employ 200 people, a third of Alcoa,” Mr Bates said.
“We’re already being hit with increased costs due to the global financial crises and the carbon tax.
“Companies like Alcoa and Ford get millions in handouts, while we get slugged.”
Mr Griffin said council had “honoured all commitments made to landowners during the course of the scheme’s implementation”.
The scheme included “significant works” at no cost to landowners, he said.
The works included a detention basin, an intersection of Bacchus Marsh and O’Briens roads and footpath crossings.
“The management of the special charge scheme has led to much lower project costs than the original estimate, which resulted in a significant benefit to landowners,” Mr Griffin said.
“I am satisfied the City has delivered a very cost-effective scheme (that) provides significant benefits to landowners.”
Mr Griffin said Regional Development Victoria was satisfied with the management of the project and the use of the grant.
City officers would write to the property owners setting out the details of the project.
Council had yet to finalise the special charge scheme, Mr Griffin said.
