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7.30 N.S.W. -

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(generated from captions) Welcome to '7:30 New South Wales'. I'm Quentin Dempster.

Tonight - armed and dangerous -

the hunt for the State's most

wanted man. I work night shift

and, yeah, leaving your wife at

home by herself, especially when you hear that he has got close, it gets a bit worrying,

yeah. And the view from below - extraordinary pictures as a

Sydney film-maker teams up with

Sir Paul McCartney. He is a

really lovely man and he really

understand and appreciates the

ocean. First, gross domestic

product. That's the bitter

charge now being leveled against the Reed Construction Group by Education Revolution Group by its Building the

subcontractor s many who have

had their businesses livelihoods destroyed. Premier had their businesses and

talks with the company this Barry O'Farrell has been in

week and has commissioned an urgent re-assessment of financial disputes. The Reed

Group is in admitted financial

difficulties with claims and

counterclaims running about how

one of this country's biggest construction companies managed

the massive stimulus spend, up

from the Federal Government. to $400 million, it received

The Reed Group attracted by generous management fees, was

long a select group of top

construction companies chosen construction companies

by the then State Government to

manage the BER money rolled manage the BER money rolled out two years ago. Many of the

small builders who won competitive tenders for BER

work administered by the Reed

Group, are themselves insolvent

or facing insolvency. The recriminations come as the

families dependent on cash flow

from the work they believed would secure their immediate

futures did not materialise. Caro Meldrum-Hanna

investigates. Six months ago, construction giant the Reed Group was at the top of its

game. Sponsor of NRL game. Sponsor of NRL champions, the Manly Sea Eagles, the

recipient of billions of

dollars worth of government building and infrastructure

works. For Reed, that winning

feeling seems sog of a

permanent fixture. - seems

something of a permanent fixture. But not everyone lucky They were a big company fixture. But not everyone got

that were very, very greedy,

hurt on the way. This is the and they didn't care who they

holiday town of foster, on the

mid north coast of New South

Wales, home to many small

builders and subcontractors

along this coastline the Reed

Group conjures memories not of

victory, but of agonising

defeat. It's hard to believe that that's 15 years of that that's 15 years of our

us. This is all that remains of life, just there in front of

Bernard and Susan Jones building and engineering business dp complete

Engineering, after the administrators tore through 12

months ago. We thought that

when Reed came up and they had

that meeting with us

introducing the BER that it was

going to be the saving grace to

government backing keep us going. It was

guaranteed. When the financial

crisis hit two years ago, the

once profitable stream of

mining engineering work mining engineering work the

Jones relied on began to dry up . If their company was to

survive, it needed diversify. The Government survive, it needed to

released the school projects,

and it was there for people

industry, that were extremely like us that were in the

struggling. Like hundreds of

other small businesses and subcontractors across the

State, for the Joneses, what

looked so right from the outside couldn't have been more

wrong. We took on a few of

those schools and they went

quite well for us, and everything went along, everything went along, and then

they just kept they just kept coming.

Everything seemed to be going

alright and the payments

stopped. So what happened? What

happened to Complete Engineering? Well,

unfortunately it folded. One

day we went to work and the

doors were locked, and... Literally locked out? Literally locked out. Everything we sewed our life

into for 15 years was locked

behind the iron doors. behind the iron doors. The

money was there, we were owed

it. We hadn't mismanaged it, it

was there. It didn't come in time. You lost time. You lost your business? Yep. You lost your livelihood? Yep. How do you make ends meet now? It's tough.

I've taken a job at the local

supermarket and I work as a

checkout chick, as the kids

say. With the collapse of their business, the Joneses found themselves bankrupt and

homeless, unpaid for tens of

thousands of dollars worth of BER work they completed under

managing contractor Reed. It's

still tough. Everything we still tough. Everything

owned went to auction, and,

yeah, you feel robbed, you feel

robbed, you see it go down the

highway to someone else. Yes,

it hurts. If you had your time

over again, would you have

taken on that BER work? No, never,

never, never in a million years. Never in a years, would have years. Never in a million

years, would have never taken

it on. They can't just not pay

us and walk away, it's just

totally wrong. I don't know how

they can get away with it,

working for Government. Across working for the Government. Across town,

another lone contractor is just

holding on. I was the plumber

on the site. Were you paid? No,

I completed the work and I'm

still owed $44,000. How long have you been waiting? Two

years. Karl and Sue Organ are just two of many, left out of

pocket when the small building

company they were subcontracted

to, Cape View Developments went

bust, carrying out several BER projects under managing

contractor Reed. What was it like working for Cape Company

screw as a company, did they

know what they were doing? I

worked for them before doing

the schoolwork and they were

fine doing domestic housing. fine doing domestic housing. I

don't know if this job was too

much for them, I don't know

that, beau they got into a lot

of trouble on this job and they

couldn't finish it. The

developments collapse under the question is how did Cape View

watch of managing contractor

Reed? '7:30' found the former

director of Cape View working

on the road,, here on this stretch of highway in northern New South

New South Wales. Yes, it's one

of the biggest regrets of my life. Even thinking about

taking on this work. Up until today, Eddy Kierum has refused

to speak publicly about what

happened to his company, but he

has agreed to talk to '7:30'. I

was in pretty bad way. If it

wasn't for my wife and two very

good friends of mine, I

probably wouldn't be sitting

here talking to you

today. Eddy, this is what

remains of your company, remains of your company, Cape

View before the administrators

tore through and basically took

everything? That's it. This everything? That's it. This is

one of the schools that brought

us undone. So Pacific Pal

manies was your undoing manies was your undoing there

at the end? It was. We at the end? It was. We were

basically told to rest assured

because the Government would be

watching Reed very closely and

nothing would happen. So who assured you, representatives

from the Government and

Reed? Yes, both Reed and the Government. They were all there

and all pretty solid on the fact that it was safe. When

work began on site, Cape View kept pace, but soon fell

behind, struggling to keep up with Reed's demands. They with Reed's demands. They liked pushing, they pushed hard. pushing, they pushed hard. Even if the situation wasn't your

fault, like with rain, no

flexibility at all, as far as I was concerned. They just

started hammering harder when

they. When they thought you

were down, they gave you were down, they gave you a couple of kicks. But the

biggest shock was yet to come.

When Eddy Kierum's co-director at at Cape Screw resigned. Within

a month, my ex-partner all of a

sudden appeared for Reeds as a

supervisor, yes, which you could have blown me away when

that happened, and then Reed

told me that my ex-partner was

going to supervise my jobs,

which I point blank refused. I said, "Don't even go there." .

After that it became pretty

much impossible to deal with

Reed. It just downhill. Despite all of this,

Eddy Kierum managed to finish

and hand over all, except one

of the schools. But in of the schools. But in the

process his company Cape View

was facing financial ruin under

the might of Reed. It got to

the point where you would put in an invoice and they would

turn around and say, "No, turn around and say, "No, you

can't have that because you've

claimed for 80% and we got you at 75%," and things like

that. Did you communicate to

representatives from Reed how dire the situation dire the situation was? They

weren't interested. weren't interested. We constantly told them that - they just kept sending emails

back saying, "Yeah, you're not

getting paid because our

figures say that we owe you

this much and you owe far more

to your trades," so there to your trades," so there was

no way in the world they were

going to come to the party. Down the line, Eddy

Kierum's trades or subcontractors were desperately

waiting for payment, but Cape

View had nothing in the bank,

hitting rock bottom and going under, taking many subcontractors down with it.

After dealing with Cape View

for quite some time you

actually get off the phone with

the reality that they can't do

anything about it, it's someone

above them, is strangling them, and it's not actually them personally,

personally, and then you all of

a sudden reality hits that you

are in exactly the same

position as them, you can't pay

the person that's ringing you.

And we were guaranteed by Reed

if we kept going to complete

the job we would get paid by

Reeds, and we did that and as

soon as we finished, Reed

fobbed us off and doesn't do a

thing. With so many broken

promises and so much financial

ruin laid bare, there are now

calls for government inquiry

into Reed's conduct as a contractor This is an absolute

sham and what we need to do is to

to make sure by having a more broader broader investigation right

across this across this State about the security of payments and the

way it's administered. Why hasn't the Government done that? Because that? Because the Government

are looking after the big end

of town. That's what it's all

about. We had a meeting with

the BER and Reed Construction -

this was back in June of last

year - and we were told

year - and we were told in

three months of that meeting we

would be paid our money. So now it's nine months later, we

still haven't been paid and

I've got a contract here I've got a contract here from

Reed where they were going Reed where they were going to

pay us today, which is the 13th

of March and I spoke to them

today and they said they're not

paying because they claim the Government still owes them

money and they're not paying

us. If Reed has its way, the Government will bail it out Government will bail it out of its current financial

woes. Well, there is a woes. Well, there is a good

reason for it is because they're all on State Government projects and at the projects and at the end of the

day we're not talking about

Reed, we've talking about 1500

small Australian businesses and we're talking

we're talking about 10,000

jobs. But for so many small

builders who long ago paid the

ultimate price, carrying out

government work, government work, their situation is beyond remare. We

sewed our life into that and if

it hadn't - if people above us

hadn't mismanaged what had happened we would still be moving along. Caro Meldrum-Hanna report. We sought

an interview with Geoff Reed,

CEO of the Reed Group. He was unavailable. Finance Minister

Greg Pearce and the Premier's

office have told us a specially commissioned re-assessment of

disputes involving Reed Group

subcontractors is now under way

by financial services

consultancy BIR Ferrier. The

Ferrier report is expected next

week after which the Government

could act to enforce existing security of payments

legislation. If they haven't already done so, distressed subcontractors should lodge

claims through the Government's website -

He has been on the run for seven years and seven years and despite

spending millions of dollars

looking for him, the police

admit there is no sign of a breakthrough. Malcolm Naden is a fugitive and alleged

murderer, and on the nation's

most wanted list. This most wanted list. This week New

South Wales police issued a renewed warning to residents in

the Gloucester area in the Gloucester area in the north of the State after the

theft of a rifle from a local farmhouse. The police believe

Naden, now armed, is still in

the area. Tracy Bowden reports.

The high country of the New South Wales Northern

Tablelands, a remote region

with dense bush and rugged

terrain. This is where fugitive

Malcolm Naden is playing a game

of cat-and-mouse with police strike force Dirk. He is

extremely dangerous, wanted man

and we want to catch him and bring him

bring him into our custody. A

crack team of 50, including the

police tactical operations unit, is based in unit, is based in Gloucester, monitoring reported sightings

and combing the surrounding area. He is one who doesn't

need human interaction. He is need human interaction. He is a

bit of a loner, and that's why

one of the reasons he is so

successful in camping out in

these remote locations. He does

have some good bush skills

because he has obviously been

camping out for about six

years, but he does go into houses, steal food, houses, steal food, steal

supplies that he has needed for

his own comfort whilst is he

camping out in the bush.

Bushland around the town of Nowendoc, population 150, has

been a focus of the search. Lyn Henderson and her mother Heather Stackman run the local motel. It is an isolated spot,

but they say they're not

nervous. No, no. I told the

police, I said, "If he comes,

we will give him a cup of tea

and you even give him the keys

to the new car," because you

don't hassle a bank robber.

You just give him whatever you

like and let him go. Like most

people that are cornered, if

you corner him, he will

retaliate, so don't, yeah,

don't put him in that position

in the first place. You know

the country around here really well. Mmm. How difficult a

task do you think the police

have finding him? impossible. It's just impossible. It's just thousands

and thousands of acres of scrub

and bushland. He has had seven

years to suss everything out

and find all his hideouts and

find out where people go and

don't go and there are lots of

forest ri huts, lots of caves.

Malcolm Naden has been on the

run since 2005. The hunt began

in Dubbo in Central New South Wales where he is wanted Wales where he is wanted over

the murder of one woman, the

disappearance of another, and

the sexual assault of a teenage girl. Since then, police have evidence

evidence he has been in evidence he has been in Scone, Kempsey and Wal cut. It's

believed he is now hiding out

around Gloucester and Nowendoc

to the north. This week police

issued a warning to locals.

Naden is now armed with a semi

automatic rifle stolen from a

farmhouse People are starting

to get a bit nervous. Like

myself personally, I work night

shift and when you are leaving

your wife at home your wife at home by herself

and a lot of blokes down there,

down at work, have got young

families, leaving their wife

and young children at home, and

especially when you hear especially when you hear that

he has got close t gets a bit worrying, yeah. Gloucester

resident s, Brian and - Mark Bryan and Darrel Wisemantel,

say they say they don't believe police

are going about it the right

way He is hiding during the day and travelling at night-time,

so these CaptainS are a waste

of time, waste of taxpayers' money.

Obviously Malcolm is out

there somewhere. I don't know

whether he is still in the

area, whether is he not in the

area, but with all the police

presence in town, if I was

Malcolm, I wouldn't be here, I

would have moved on or found

somewhere else to hide

or... They reckon that these

police dogs can't get a scent

because he has gone feral, he

hasn't got the human scent

anymore, I don't know, they're wasting their time. Everyone

you speak to around here you speak to around here can

tell you the latest stories

about may come Naden. Some even

report sightings. A woman said

she saw Malcolm Naden a she saw Malcolm Naden a couple

of days ago dragging a dead

kangaroo off the road. It has

become a joke, I think. People are laughing about it. Elle

Fraser runs two B & Bs in the region. She has strong views

about the resources being

poured into the manhunt. I poured into the manhunt. I know

that they're spending an awful

lot of money and that the road

that we have to drive on to get

out to that - o our out to that - o our property

looks like a disused looks like a disused fire trail. I think maybe it would be better to spend the money on

the roads in this area than on

Malcolm. Why didn't they have their operations that they're

having now four years ago or

five years ago when it

happened? Why have they waited all this time and then all of a

sudden decided to go after sudden decided to go after him?

Why is that? So hope have you

spent? I've seen one report 3

million? Well, I'm not going million? Well, I'm not going to

into the exact details of into the exact details of money because it's really an issue

about the community safety. The

difficulty is if we don't mount

the search, we don't continue

on to leave Malcolm Naden out

there in the community is a

risk we don't to pay for, so at

the moment we have our

operational strategies. We believe we know the broad area

he is in and we'll continue

searching. The strike force is

based in the industrial area on

the outskirts of town. The manhunt has certainly manhunt has certainly boosted

business. Thanks to the police,

media and curious tourists, the

local motel is booked out and cafes and pubs are doing a

roaring trade. As roaring trade. As it happens,

this area has historic links this area has historic links to

another elusive fugitive. The

main road along here is called

Thunderbolt's Way, named after

the infamous bush the infamous bush ranger

Captain Thunderbolt or Frederik

Wordsworth Ward. He was on the

run from police for more than

6.5 years before being shot

dead back in 1870 We are on hot on his tail, but at the end of

the day you need everything

going for you, not just a few

things. Back in December,

police were confident they had

their man, but things didn't go

to plan. A police officer

suffered a gunshot wound and their prey once again slipped

away into the bush In response

to a request from the Police

Commissioner, we have agreed to

increase the reward to

$250,000. There was another

sighting just two weeks later. It was disappointing.

The police are all The police are all disappointed that we were so close and

didn't catch him. Isn't getting embarrassing, all these

officers, all this time and

money and no result? No, it's

not embarrassing. If people

were to drive up into this

area, they would realise how remote and difficult it was.

The officers are still

motivated and they are the ones

going out every day and are

optimistic that we will locate

him. As for the people who live

here, they would like to see an

end to it all, but in the

meantime, they're making the

most of the situation, and like local butcher Darrel Wisemantel, they're maintaining

their sense of humour. Malcolm

did ring up the butcher shop at

Christmas and ordered a ham and

asked me if I could drop it off

at Mount Och, because he heard the hams are really good.

It has been really good for business. So you've had full

house? For over a month we had

full house. It has been great.

The workload was tremendous,

but it's been good! Joke as

side, the police insist Malcolm

Naden is a dangerous man. How

long can you keep this going? Well, that's a difficult

question and I haven't got the

answer to that. Whilst we are

confident that he is still in

this area and whilst he is

still an extreme Rhysing, still an extreme Rhysing, we will be continuing on with the

strike force. When former Beatle Sir Paul McCartney

Beatle Sir Paul McCartney saw

the underwater footage shot by

an Australian film-maker, he

couldn't wait to get his hands

on it. The vision belonged to

the well-known surf film

director Jack McCoy, who grew

up in Hawaii but now calls

Sydney's Northern beaches home.

The footage was featured in

'Blue Sway', but it will next

be moved in the next movie, 'A

Deeper Shade of Blue'. Shah Ron

McEvoy caught up with Jack

McCoy for a preview. 'A Deeper

Shade of Blue' is my 25th film

on surfing. I would like on surfing. I would like to

think that we spent most of our

time focusing on making a time focusing on making a film that people who didn't surf

would enjoy. It's not a surf

movie, per se, it's a film

about surfing. I believe that

surfing is a spiritual dream. It's extremely peaceful.

Nothing else matters but that

place in time. Everything is non-existent

but that moment. I was brought

up in Hawaii, and I have deep

roots there, even though I call

myself an Australian now, but

it was something that I grew up loving and sharing, loving and sharing, learning about the Hawaiian culture about the Hawaiian culture and

surfing was such a big part of

it. This film was an

opportunity really for me to

pay back to Hawaii something

that it gave me. As he rode a

wave to its final thrilling grasp, the wave's energy

embraces you, and it makes you feel good.

For years I've been filming

behind waves, and the show that's underwater behind that's underwater behind the

surf is spectacular, and I've

been able to, with my camera,

go under water and have a

wide-angled lens and bring back

some amazing pictures, but I

was always stuck in one spot,

and then about three years ago,

a very dear friend of mine,

Todd Bennett, turned me onto

this underwater jet ski. The

minute I got into the water

with this thing, I went, "This

is the answer to my dreams!"

I made a little sequence of

the first big day that I the first big day that I went in, to a Paul McCartney song

called Is This Love, and it

worked really well. worked really well. Shortly

thereafter a friend of my come

out from London and I showed

him the sequence and he him the sequence and he says,

"Has Paul seen this?" I go,

"no." He said, "Let me "no." He said, "Let me give him one." About six him one." About six months later, he rang and said, later, he rang and said, "Paul

really loves what you've done.

He wants you to create

something for a new song he something for a new song he has created." The opportunity to

collaborate with a Beatle has

been one of the highlights; as

you can imagine, in my life. Is

he a really lovely man and he

really understand and

appreciates the ocean, this is

what I really love, and

together we use this Lyle music

clip to help support a surf rider foundation. Surfing is a

- well, someone told me it is a

$6 billion industry. They're having a rough time at the

moment, but, you know, you can

see that from the very humble

ancient beginnings that it's grown into something that, you

know, is enjoyed by millions of

people around the world.

SONG: # From your tower of ivory

# I hear rattle of jewellery

# But in a hard-bitten irony

# You're a pillar of the commune

# When you come down... #

I like to think that when you

ride your first wave, a little

spirit enters into your body

and you become this very

different and unique

person. You become a lot more

in tune with nature, but more

than anything, when you ride

your first wave, it's something

you never forget. I remember my first wave as if it was yesterday, and yesterday, and I think that

what the feeling you're left

with is three simple letters -


For me, I just really want

to share what where surfing started, and I would like

Hawaii to get the respect back

for it being its greatest

cultural gift to the world, you know. It wasn't the hula hoop

or the hula or the slide guitar, it was surfing. That

Hawaii has given to the world,

which is, when you think about

it, is really amazing, and this

is really the story about where

that all started, and it gives

anyone who has any interest anyone who has any interest in the ocean an opportunity to

actually see kind of where it

all began, and what it indecent

the Hawaiians, and what it

means to us as surfers today.

SONG: # For some reason I can't explain

# I know St Peter will call my


# But that was when I ruled the

world... # Extraordinary film-making. What will

What will they think of next? 'A Deeper Shade of Blue' will be in cinemas from March 22nd.

That's the show for this That's the show for this week. Bye-bye.

Closed Captions by CSI.

This Program Is Captioned

Live. This week on State to State. Crash investigators write off their own cars. It's

a good opportunity to actually

see a real crash and then see a real crash and then go and collect the evidence and

investigate it. Making movies

on mobiles. The accessibility

of all of that sort of technology is giving everybody

the chance to make any film they want. And strange they want. And strange fish spotted in