School builders ‘leaving sub-contractors unpaid’

BUILDERS awarded school-building projects have been leaving sub-contractors unpaid, Tánaiste Mary Coughlan has revealed.

The Education Minister told a Dáil committee that while her department has been getting improved value on tenders for school building contracts, there are concerns that some firms are offering to do work too cheaply and subsequently running into trouble themselves.

“A number of projects are taking considerably longer than anticipated and the costs have even gone down more dramatically than last year.

“The one thing I would have a concern about is that if [the tenders] are too low and we end up just two or three months into a contract and [the builders] are not able to continue,” the Tánaiste said.

“There are issues where the department has paid a contractor and the contractor hasn’t paid other people down the line,” she told the Select Education Committee.

Ms Coughlan was responding to questions about how €79 million of her department’s building budget for last year went unspent and had to be carried into this 2010.

She said a number of technical staff in the Department of Education building unit have left but will not be replaced because of the public service hiring ban.

Fianna Fáil Mayo TD Beverly Flynn said she is aware of cases where competition for school projects is so competitive that the successful builders are going out of business, which in turn creates delays on the work.

Committee chairman Paul Gogarty suggested that the Department of Education should advance more schools’ projects to the planning application stage so they could move along faster when others run into delays.

“There is five years before a planning application elapses, so even if they don’t get [to construction stage] this year, at least if another school project falls behind they are ready and could be brought up the list straight away,” the Green Party TD said.

Fine Gael education spokesperson Brian Hayes suggested that allowing more schools to proceed to tender and construction stage would ensure money would be left unspent because of delayed projects, but Ms Coughlan said further announcements later this year will mean projects can be funded from the start of 2011.

She told the committee that her officials are still in discussions with the Department of Finance to ease restrictions which mean that only builders with a turnover of more than €10m can tender for some contracts.

“I’ve asked the department to change that criteria in order to allow smaller contractors bid,” said Ms Coughlan.