Jackson McDonald has played a key role in a pioneering deal in Western Australia, whose use is being encouraged by the state’s government.
The top WA firm advised the City of Fremantle in the inclusion of a tailored project bank account (PBA) regime in the construction of the city’s $41.3m civic centre and library in Kings Square. The firm’s team was headed by finance partner Hilary Hunt and construction partner Thomas Jacobs.
This is the first PBA used by a local government in the state and is believed to be the first implemented by a non-state government entity.
The deal comes after the WA government publicly said last year that it supports the increased use of PBAs in a broader range of government projects from 1 July 2019. It also comes as the issue of timely payments to suppliers, contractors and subcontractors has been front and centre after the Murray Report at the national level and the Fiocco Report in WA.
“We are the first local government in WA, and possibly Australia, to include the requirement for a project bank account on a project like this,” said Glen Dougall, director of city business for the City of Fremantle. “The PBA will guarantee subcontractors are paid within one day of the head contractor being paid, and that the head contractor can only take their portion once they have paid the subbies.”
Jackson McDonald said that its PBA documentation gives principals the ability to demonstrate responsibility for timely payment to subcontractors. It also gives contractors the ability to demonstrate real security of payment to subcontractors, as well as give subcontractors payment security.
“At Jackson McDonald, we’ve developed our own suite of PBA documents, tailor-made for principals, and designed to simplify the process of implementing and managing a PBA for all concerned,” Hunt said.
“We made sure that the city had the ability to view the PBAs and to take over if things went wrong – but without having to commit resources to actively oversee the payment process or make direct contact with subcontractors,” Jacobs said.