CASH-strapped Cairns construction company CEC has suffered another blow with Cairns Regional Council demanding it pay back $500,000 or face court proceedings. 

The council said legal action would start if CEC defaulted on a payment plan outlined by the company after it had trouble meeting its share of costs related to a development plan for the south side of Cairns.

CEC, along with other developers and the council, had agreed to contribute to the cost of creating the Mt Peter development plan but CEC has not been able to pay in full its share owed to council.

The council has also warned it will terminate CEC’s membership of the Mt Peter agreement if the company fails to meet its payment obligations.

A recommendation that legal action start immediately upon any default of the payment plan was put forward in closed session at the council’s planning and environment committee meeting yesterday.

Council planning boss Peter Tabulo said the move was an insurance policy.

"We have a process set up where we issue invoices for the contributing members and CEC have had difficulty paying those invoices and they have come back to us with a plan to make payments," he said.

"Council has taken the view we are prepared to agree to the plan that CEC has suggested so basically a once a month payment will come in."

Mr Tabulo said if CEC did not meet its obligations then the council would take legal action.

He said the four other contributing developers had all paid in full.

The council threat marks a horror 14 months where CEC’s shares have plunged from $2.72 to 24c late yesterday.

CEC boss and co-founder Roy Lavis said he was confident the company would fulfil its obligations to council.

"After a tough time things are starting to look very bright for the company," he said.

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