Department intervention rescues council from meltdown

LIMERICK City Council appears to have been saved from potential financial ruin.

The Department of Environment has rescued the city council following a decision, six years ago, to dismiss a major construction company from Limerick’s main drainage scheme.

The company, Uniform Construction, was fired from the scheme in 2001 amid claims they were not progressing work with due diligence.

However, the company succeeded last year in an action against the local authority and was awarded damages, in excess of €32 million.

It was believed, at one stage in the dispute, that damages could run to more than €50m.

In their argument for central government funding to pay the damages, Limerick City Council officials insisted they had taken legal advice from the Department of the Environment about the manner in which they had dealt with the dismissal of Uniform Construction.

As the department gave the advice, the council insisted the department should pay the bill and the court award should not be levied on the council.

The department, meanwhile, confirmed yesterday it had already refunded the council to the tune of €28 million.

Limerick city manager Tom Mackey said the department had looked after the council in a timely fashion.

The council expects to recover 4m still outstanding in the payments made to Uniform Construction.

Hegarty Construction was later brought in to complete the contract and did so, on time and on budget.

As a result of being fired from the scheme, Uniform Construction was prohibited from tendering for public contracts and estimated that it had accrued losses of €30m in 2003, alone.

The company had previously carried out a number of major motorway contracts in various parts of the country.

The company was awarded €32.2 million last year by the Court of Arbitration.