High price of safety – services rip-off alleged

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Legendary movie director Alfred Hitchcock is reputed to have said: “I never said actors were cattle, I said they should be treated like cattle.’

Sometimes you get the feeling that our various state governments and a not insubstantial number of service providers feel the same way

It seems that we are expected to pay hundreds of thousands of dollars for the privilege of being milked by some businesses while “consumer protection” in its various forms looks the other way.

We’ve already exposed the grubby world of embedded networks and the scandalous treatment of apartment owners in Queensland elsewhere on this website. 

And that has inspired a Melbourne apartment owner to alert us to a rip-off that he alleges allows safety inspectors to identify problems and then fix them at the owners corporation’s expense, with no checks on whether the defects are real or the repair costs are fair.

By the way, the comments about “essential services” are not specifically related to any company that has those words in their company title – and there are a few.

“Essential services” is a widely used and generic term to describe these functions. No specific companies are identified or targeted in this article.

This is his letter to us (almost) unedited.

I am writing to ask if you are familiar with what must surely be one of the greatest rip-offs ever that is operating in our midst in Melbourne, and I daresay elsewhere – the essential services contractor. 

What is going on in this sector is surely nothing short of criminal – yet because it is wrapped up in in a cloak of “safety”, the practices in this area may be largely immune to public scrutiny.

Briefly, Victorian apartment projects are required to appoint essential services contractors who conduct regular inspections and provide annual certification covering issues primarily concerned with fire safety, including matters such as:

  • checking evacuation pathways for blockages;
  • checking availability and operability of fire and smoke alarm systems;
  • operation of fire doors;
  • availability and state of fire extinguishers;
  • operation of fire sprinkler systems;
  • installation of appropriate fire collars on pipework that penetrate concrete slabs and walls;
  • pump maintenance and monthly test operations, where diesel booster pump sets are installed;

In general, you would have to say that this is a good idea – nobody wants to see fire safety compromised. In a medium sized building, say thirty five apartments over four storeys, where a diesel pump has been installed to boost local fire service water pressure, this service might cost the OC around $5000 pa in a fairly competitive marketplace.

But in reality, what happens is that once the base contract is awarded in a competitive tendering situation, absolutely egregious over-servicing sets in and the OC Manager is either under-qualified or doesn’t really care, so the Management Committee is left with little choice but to approve absolutely outrageous quotes for extra items that can easily double or triple the annual cost of this service.

These costs arise from two directions:

Revisiting the basic fire services incorporated into the building at construction:

Don’t forget that the building has had to pass a rigorous Fire Engineering planning and inspection routine undertaken by an independent Fire Engineer and the Melbourne Fire Brigade (MFB), who have both signed off that the building’s fire services are fit for purpose, against the detailed written specifications that govern these matters. 

But the essential services contractors are shameless in jumping into this space and asserting that twenty or so slab penetrations should have had fire collars fitted at construction, and this work must be done now at $150 a pop…. never mind that there are valid reasons why these were not fitted in the first place, or that even if the work does need to be done, a fully qualified plumber can fit them for $50 each.

I recently had a quote for $1,750 from the essential services contractor to install a sieve on the water inlet of the diesel fire set in my building, to “prevent tiny stones that sometimes are contained in the water supply from damaging the pump”.

This sounds like total BS to me and it’s certainly not something the pump’s manufacturer or the installing contractor recommend – but you try getting anyone to “guarantee” you that a problem will never arise.

Essential services contractors specialise in exploiting the fear and uncertainty that ordinary OC members experience when dealing with unfamiliar and “technical” issues such as this, to their ultimate advantage.

Egregious ongoing maintenance charges.

Perhaps the best example here is a recent quote for over $2000 to replace the batteries on the diesel pump set… these must be replaced every two years. 

Never mind that the batters are available off the shelf for around $500 in total, and that it is a matter of no more than 10 – 15 minutes to change them over (same system as your car battery, so 10 – 15 minutes for two of them is actually generous).

Over-priced replacement of emergency lighting at the first sign of failing to stay on for the full duration of testing is another contractor-defined favourite for revenue generation. 

Of course regular maintenance is required – but allowing the people who define this maintenance requirement to actually carry out the work at anywhere between two and four time fair costs without any form of tendering is just completely egregious.

I am totally appalled at how these contractors behave, and have instructed the OC Manager managing my building that as a matter of principle, the essential services contractor is never to be engaged to perform any repair or maintenance work that they suggest or identify, to avoid the obvious conflict of interest. 

A simple change of regulations that separates the duties of “regulator” and “maintenance contractor”, allowing these companies to perform only one function for any given building, would save building owners millions of dollars each year, I believe.

Apart from ensuring they NEVER accept quotes for work from their essential services contractor, one other thing OC’s of new buildings can do is make sure they commission an independent essential services survey before their building exits the warrantee period, with a view to identifying issues that genuinely should have been dealt with at construction time. 

This sounds like it would be a simple solution, but unfortunately there are frequently many interpretations and answers available on these issues – it’s not at all unusual for a builder to put up his own expert, saying that the work isn’t required!! 

Again, no company using the words “essential services” in their trading name has been identified in this article.  The term is generic and in wide use. We have no doubt that many essential services contractors provide honest appraisals for work at reasonable fees.

One Reply to “High price of safety – services rip-off alleged”

  1. Avatar Jimmy-T says:

    This is now being discussed in the Flat Chat Forum

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