Contractors plan court action to recover EFCL debts

AT least one group of contractors is expected to file an action in the courts by next week to recover debts owed by the soon-to-be-wound-up Education Facilities Company Ltd (EFCL) by next week.

Others are being urged to unite to fight “further injustices in the future.”

On the weekend, over 60 contractors, consultants and other creditors met to discuss the way forward, Newsday was told by a representative of the group, the EFCL Unpaid Contractors and Consultants Action Committee.

Those who attended the meeting were told one group of contractors was initiating legal proceedings and had engaged a “strong legal team” looking to file an action by April 11.

Another reportedly sent a pre-action protocol letter to the Office of the Attorney General last year.

Last Friday, the organisers of the meeting said they intended to “pursue payment by all legal means necessary,” via a press advertisement which also called on other unpaid consultants and contractors to unite to recover the money they are owed.

Interested parties were given an e-mail address and invited to attend the meeting so they could be included in any action taken.

They were told it was imperative for the relevant court proceedings to be filed in the next two weeks, before the scheduled hearing of the company's winding-up petition on April 25.

“We asked all attendees to start getting their documents together. These documents will include judgments (with updated figures), writs and/or certified payment certificates, letters of commitment etc.”

By this week, those interested in joining the proposed legal action are expected to receive an update.

So far, the organisers have declined to identify themselves, but they gave Newsday an account of last weekend's meeting.

“We discussed the grave injustice, seriousness and urgency of the matter,” those who responded to the e-mail were told.

“The Government has decided to wind up EFCL even though it owes contractors and consultants between $600 (and) $800 million dollars without even consulting or communicating with these creditors.

“We have learnt that some were paid in full while others were discriminated against or victimised.”

The group said it could be a very dangerous precedent if any government could "cherry-pick who they wish to pay, and simply close down indebted state-owned enterprises and leave its other creditors, citizens, on the breadline."

It said all the EFCL's creditors "stand to be deprived of the money we worked hard for and maybe face further injustices in the future if we do not take action now.”

Contractors and consultants were urged to come together to co-ordinate their efforts, since “there is strength in numbers.”

The grop pointed out, “Taking on the Government legally would also be costly as the matter may have to go all the way to the Privy Council. It is not something that one or two contractors can afford on their own, so it makes sense to get together and split the cost on a pro rata basis.”

The e-mail explained the purpose of the committee was to co-ordinate to facilitate a unified effort.

“It is a group of volunteers. It is not a registered organisation nor will it be. An action will not be brought in the name of ‘EFCL Unpaid Contractors and Consultants Action Committee.’ It will be for the contractors to join in with others in actions that are already in motion or to proceed on their own if they like.”

Contractors and consultants were told it was completely up to them to decide if they wanted to join in bringing legal proceedings, whom they wished to join with or if they wished to go it on their own with their own legal representatives.

“The committee will try to assist by providing information and putting stakeholders in contact with others or their legal teams as may be necessary,” the committee said, while also saying it was in the best interest for all to avoid too many separate proceedings.

“In any event, though, our goals are aligned and if there are multiple court proceedings they can be brought together and heard together.”

Government winding up EFCL

Government filed the winding-up petition in February after arriving at a decision on the debt-ridden EFCL’s future.

Staff were told the company was “unable to carry on the business for which it was established and has decided to close down its undertaking and go out of business.”

The EFCL was put under the direct management of the Finance Ministry.

In 2018, the National Maintenance Training and Security Company Ltd (MTS) took over school repair projects for the Education Ministry.

In March, the Joint Consultative Council on the Construction Industry (JCC) revealed the EFCL owed its creditors “well over $600 million,” most of which represents money owed to contractors and consultants, going as far back as 2015.