School building projects hit by collapse of Carillion

Updated / Wednesday, 24 Jan 2018 07:32

Carillion was part of a consortium contracted to build five schools and one further education college in Ireland

Progress on the construction of six large scale school buildings is in doubt following last week's collapse of the UK construction company Carillion.

The company was part of a consortium contracted to build five schools and one further education college in Ireland to cater for thousands of students.

A Wexford school, which had expected to move into its substantially completed new building tomorrow, has confirmed to RTÉ News that the building's delivery has now been postponed indefinitely.

In Carlow, where two buildings to cater for 2,000 students are under construction, workers were told today to go home as the site was shutting down.

RTÉ News understands that concerns around payment have caused uncertainty among subcontractors there.

There are unconfirmed reports that work has stopped or slowed at a third site in Bray, Co Wicklow.

Coláiste Ráithín in Bray was supposed to get the keys to its new school building yesterday, but that has also now been postponed.

The principal of Loreto College in Wexford said he understands that issues around the future maintenance of the new school building are the cause of the delay.

The consortium of which Carillion was a 50% shareholder has been contracted under a Public Private Partnership to construct the buildings and also maintain them for 25 years.

Principal Billy O'Shea said that another contractor must now be found to maintain the building before the school can move in.

Public Private Partnerships are a mechanism whereby the State outsources public projects to the private sector.

The mechanism is widely in use in the UK but has proven controversial there.

Under a PPP, the State begins to pay for the project once the buildings are complete. So the State has paid almost nothing as yet towards these projects, worth around €100 million.

In a statement this evening, the National Development Finance Agency said it is now up to the PPP consortium's funders and remaining shareholders to intervene and implement rectification measures to ensure the projects are completed.

It has confirmed that the State is not obliged to make any further payment until the full works and services are satisfactorily delivered for each school.

It said discussions between the parties are in progress and every effort is being made to ensure delivery of the schools in as timely a manner as possible.