New laws to compensate businesses financially impacted by delayed roadworks projects proposed by SA-BEST

14 March 2019

Businesses and property owners that experience extended financial hardship due to major delays in state and local government infrastructure projects will be entitled to compensation under new laws proposed by SA-BEST.

SA-BEST MLC and Transport and Infrastructure spokesperson, Frank Pangallo, said he would introduce a Private Members Bill for mandatory compensation payments to be made if there are significant and avoidable delays in completing in major infrastructure projects, like the $620 million Darlington Upgrade Project and the $800 million Torrens to Torrens project.

His call comes after visiting the West Croydon and Kilkenny RSL club on Rosetta Street at West Croydon where Charles Sturt Council’s road works have cost the centre almost $20,000 in lost trade since September last year – after the club was promised the works would be completed by February and are still yet to be given a firm completion date.

The club expects its total losses to reach $50,000 if the works continue until May or June.

“This isn’t good enough. The survival of clubs like this is dependent on the patronage they get,” Frank said.

“But if patrons can’t get there because the streets are being ripped up, the club will miss out on income they cannot recover, putting unnecessary pressure on their financial position,” he said.

“While we all expect road works will always cause some form of disruption, the impact needs to be minimised, even if that means work is to be done after hours.”

Frank said he would investigate extending his Bill to include local government projects and he would also seek to establish a Parliamentary Select Committee on the issue as more significant infrastructure projects are being slated.

Unlike other states, the SA Government is under no obligation to compensate business hit hard by road works

Under Frank’s proposed bill, a business that can prove severe financial disadvantage as a direct result of excessive and avoidable delays in the completion of a major infrastructure project would be entitled to seek compensation.

Frank said a parliamentary inquiry would seek submissions from the business and construction sector, as well as property owners and developers, and also determine how the amount of compensation should be calculated.

“Road works can and have killed small and family-run businesses. They shouldn’t have to bear the brunt of delays,” Frank said.

“Construction companies will be required to provide a schedule of works to property owners and businesses - and if they cannot keep to acceptable or agreed deadlines, they will need to show cause.

“If businesses can prove financial hardship as a direct result of excessive and avoidable delays, they should be compensated.”

Frank cited other examples where project delays severely impacted on the survival of businesses – with one Hindmarsh business losing $700,000 as a direct result of the Torrens to Torrens project and another, the Red Door Bakery, in Queen Street, Croydon, being forced to close, and its owner forced to sell off the family home and on-going road works in George and Phillips Street, West Thebarton.

“One large food retailer lost a weekend of trade when construction workers blocked the business’ car park without providing any notice. Why should they have to bear the brunt?” Frank said.

“Transport Minister, Stephan Knoll, has promised that his department would engage and assist businesses and property owners affected by roadworks but it isn’t working,” he said.

With a raft of other major road projects either underway or about to get underway - including the Oaklands rail crossing, the mooted South Road development from the Gallipoli underpass to Tonsley, the Daws- Goodwood-Springbank roads re-routing and the King William Road pavers replacement - major disruptions will occur. 

“Local councils are also dragging their heels with works falling behind schedule in a number of council areas and they need to get their act together,” Frank said.

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