EDUCATION MINISTER RICHARD Bruton has said he is confident the collapse of the UK construction company Carillion will not jeopardise the construction completion of a number of Irish schools.
There are concerns over hundreds of projects on the books of the company which was forced into liquidation after its huge financial troubles of £1.5 billion made the firm buckle.
Carillion is involved in a number of projects in Ireland, including five schools and the Carlow Institute of Further Education.
Last year, the National Development Finance Agency (NDFA) announced that the contract for the government’s Schools Bundle 5 PPP project was being awarded to the InspiredSpaces consortium – a joint venture between Carillion and the Dutch Infrastructure Fund (DIF).
The NDFA acted as an agent for the Department of Education and Skills in the procurement of the project.
Carillion is responsible for the design, build, finance and maintenance of five schools on four sites in counties Carlow, Meath, Wexford and Wicklow. The schools included are:
- Tyndall College Campus in Carlow, which will consist of a development that will provide accommodation for over 2,000 post primary school and Further Institute of Education students
- Eureka Secondary School, Kells, in Meath. The project involves the replacement of the post primary school and will provide 800 pupil places
- Loreto College in Wexford, where the secondary school will provide 900 pupil places
- Coláiste Ráithín, Bray, County Wicklow is to be replaced with 450 pupil places
- St Philomena’s National School in Bray, where 24 classrooms in the school are to be replaced. Both Colaiste Raithín and St Philomena’s NS will be constructed on a single new site in Bray.
The estimated capital value of the contract is approximately €100 million. To date, the State has made a payment of €4m in respect of off-site works.
Responding to TheJournal.ie, the Department of Education and Skills is aware of the compulsory liquidation of Carillion.
The department said the NDFA is currently assessing the implications of the Carillion liquidation on the contract for the schools mentioned above.
It noted that the NDFA is liaising with DIF in relation to next steps, adding that at this time, the school buildings in question are approximately 90% complete.
The statement continued:
The Department of Education and Skills remains committed to the full completion of these schools in as timely a manner as possible.
The State is not obliged to make any further payment until the full works and services set out under the contract have been satisfactorily delivered for each school.
Bruton on Corillion collapse pic.twitter.com/PMA0oK2r4H— TheJournal Politics (@TJ_Politics) January 15, 2018
The Department of Education and Skills said it is monitoring the situation closely and will provide a further update as available.
Education Minister Richard Bruton reiterated that the State has only paid out a small sum of money on works that have already been completed, adding that the State own the schools.
He said he is confident the NDFA will be able to discuss a process for resolving an completing these works with the remaining shareholder.
An NDFA spokesman said that in accordance with international best practice, the schools contract includes detailed provisions that apply in the event of the liquidation to ensure that the project proceeds on a “business as usual” basis with minimal disruption.
The NDFA said it does not envisage material disruption or delay to the works. However the NDFA is actively monitoring the position in the context of the robust contractual protections under the contract.
Worldwide, Carillion has been involved in a number of large-scale projects, such as Battersea Power station redevelopment and the Anfield Stadium expansion. It was also due to be involved in the forthcoming HS2 high-speed railway line in the UK.
The company employs about 20,000 people in the UK, however Sky News reports some 43,000 jobs worldwide now hang in the balance.
TheJournal.ie has attempted to contact Carillion for comment.