State bodies told to find solution to owed €20m from school builds

State bodies told to find solution to owed €20m from school builds
Pearse Doherty: "Do not facilitate them in anything but making sure the subbies get a payment. You hold the aces."

By Niall Murray, Education Correspondent

State agencies have been told by TDs and senators they must find a resolution to the non-payment of up to €20m owed to contractors on a public-private partnership (PPP) school building project.

Sub-contractors and suppliers who had provided equipment or work on the five schools and a further education college are collectively owed between €5m and €20m following the liquidation of the main contractor Sammon in June.

Some placed pickets on sites last week but court injunctions forced them to be lifted and work has resumed as the replacement main contractor takes steps to have three of the schools ready to open by the end of August.

At the Oireachtas finance committee, National Development Finance Agency (NDFA) officials insisted that responsibility for payment was with the Sammon group, now in liquidation, which had sub-contracted the various suppliers and other companies which were left out of pocket.

Sammon was the main contractor for the PPP company with which the Department of Education entered into a deal in 2016. But UK building firm Carillion, one of two partners in the PPP company, collapsed in January which, in turn, contributed to Sammon’s liquidation.

The NDFA said it has impressed on Dutch Infrastructure Fund — the remaining company from the original joint venture with Carillion — that they should engage in the first instance with contractors in the supply chain established by Sammon before its collapse.

However, they repeated their assertion to committee members three weeks ago that the agency has no authority to insist who should be engaged by DIF or Woodvale — which has replaced Sammon — to complete and certify works on the site.

Whilst DIF (and its counterparty Woodvale) will endeavour to reach agreement with the existing subcontractors where possible, they have made it very clear that they cannot accept a position whereby they must use the existing subcontractors, including resolving the amounts being claimed for work done by those subcontractors but not paid for by Sammon,” said NDFA head of project management David Corrigan.

The NDFA paid around €3m last year for preliminary site works but it has yet to pay the PPP company any of the scheduled €264m for the building and maintenance of the schools over the next 25 years.

Sinn Féin’s Pearse Doherty told the NDFA it holds the aces as building regulations say the sub-contractors have to sign off on their own work, and the PPP company will not begin receiving payment from the State until the schools are delivered.

Do not facilitate them in anything but making sure the subbies get a payment. You hold the aces. You are the ones who will authorise the cheques of over quarter of a billion to this company, they have got an awful lot to lose,” he said.

Committee chairman, Fianna Fáil’s John McGuinness said the NDFA, Department of Education, and Department of Public Expenditure and Reform are continuing to wash their hands of any responsibility to sub-contractors.

He appealed to all the parties to use their common sense and find a resolution, noting the committee would be asking the Comptroller and Auditor General to examine the matters.

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