Gama Irish losses swell to €15m

CONTROVERSIAL Turkish construction firm Gama, saw its losses in Ireland swell to more than €15 million in 2004.

The losses at the company, which was accused of paying hundreds of Turkish workers here as little as €2 an hour, were treble the amount recorded in 2003 despite its turnover increasing by €60m to €149m.

Its latest accounts show a deficit of assets over liabilities of €16m and it is reliant on its Turkish parent company support. Retained losses increased to €21m.

Gama Construction Ireland’s new auditors, PFK Ryan Glennon prepared the company’s accounts for 2004 on going concern basis as its “shareholders have notified the group, in writing, of their intention to provide any financial support required to enable the group to meets its obligations as they fall due”.

No corporation tax was paid by Gama in 2004 because it made losses.

PFK Ryan Glennon was appointed as Gama’s auditors earlier this year after PricewaterhouseCoopers suddenly resigned. In a letter to the Companies Registration Office, PWC said it quit because it was not given information by Gama about the alleged “breaches of employment rights in respect of Turkish workers who are employees” of the company.

A report by inspectors from the Department of Enterprise, Trade & Employment into pay conditions at the company was quashed by the High Court in the summer. The department is appealing the decision to the Supreme Court, but Gama says that it is “confident” that the appeal will not be successful.

Staff costs for the company’s 1,188 employees decreased from €33.5m to €31.8m. The number of people working for the firm rose by 122 in 2004.

The five directors of Gama, listed in the accounts as Hakan Karaalioglu, Ergil Ersu, Ugur Yurdakul, Ahmet Ata and Patrick O’Toole shared almost €180,000 in pay and pension contributions.

The company’s accounts also reveal that the company is in dispute with Foster Wheeler, the principal contractor on the Shannonbridge and Lanesborough power stations.

Gama was the sub-contractor on the projects and is now seeking €15m from Foster Wheeler. The dispute has now been taken to an arbitration tribunal.

“Should the company be successful in this arbitration, a maximum sum of €15m (including €8m recognised in the financial statements), will be due to the group,” it said.

“In the event that the claim is unsuccessful, the effect on the financial statements will be that some or all of the assets of €8m be not be collectable.”

Despite the controversy surrounding Gama this year, its ability to win Government business has remained intact.

In September it won the €50m contract to build the Castleblayney bypass in Co Monaghan.

It is also looking at the sale of its 80% stake in the Tynagh power station in Galway, which could net the company more than €120m.