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Sammon liquidation: Schools say they're still optimistic they can open their doors in September

On Tuesday, Sammon Contracting Ireland Limited was placed into liquidation.

File photo
File photo
Image: Sasko Lazarov via RollingNews.ie

AMIDST SOME FRUSTRATION, some schools impacted by the collapse of UK construction company Carillion have expressed hope that they will open their doors this coming September despite the news that building contractor Sammon has been sent into liquidation.

Speaking to TheJournal.ie, Billy O’Shea, principal at Loreto secondary school in Wexford town, said that “it would be unthinkable” that the school’s new building wouldn’t open its doors at the end of the summer.

In mid-January, it emerged that work had stalled on a number of schools after the UK-based firm went bust with debts of £1.5 billion (about €1.7 billion).

Carillion was part of a consortium, Inspired Spaces, hired to build five schools and one further education college in Ireland.

On Tuesday, Sammon Contracting Ireland Limited was placed into liquidation. The High Court has appointed Stephen Tennant of Grant Thornton as the liquidator.

The group was hired by the consortium that included Carillion to build the education buildings in Ireland. However, following the collapse of Carillion, the tender that Sammon held for the schools in question was placed for re-tendering. A new firm has yet to be selected.

The affected school buildings are in Carlow, Meath, Wexford and Wicklow.

School impact

Of the affected schools, Coláiste Ráithin in Bray in Co Wicklow was due to receive the keys to its new building as far back as mid-January, after continuous delays. However, the Carillion collapse and re-tendering process pushed back the school’s opening once again.

The news that Sammon has gone into liquidation has sparked concern amongst parents, but the school’s principal is hoping that a solution will be found in the coming months.

Speaking to TheJournal.ie, Aileen O’Reilly, chair of the school’s parents committee, said that they have “gone past frustrated” waiting for news of the new building’s opening.

“We’re looking for the government to actually do the extraordinary thing and to bring in a ministerial order to get [the school open]. I know that’s a simplistic view, but really the government has to do something,” O’Reilly said.

“We’ve gone past frustrated, we really have. It’s deplorable and infuriating,” she said.

She previously told TheJournal.ie that there are overcrowding issues on the current premises, which includes a number of prefabs, as well as heating and dampness issues, no wheelchair accessibility and “no sports facilities, no library, no canteen”.

“[The school] is appalling, but it has been appalling for so long,” she said. “It’s pathetic, it really is, it’s fairly shocking.”

When asked whether she is hopeful that the new school will be open in September, O’Reilly said: “It’s hope without really any basis, or at least with a lot of doubt. This has gone on for so long. You don’t know what to believe because we’ve been told so many different things and so many different dates.”

However, principal at Coláiste Ráithín, Gearóid Ó Ciaráin said that he was “expecting” the news of Sammon’s liquidation.

Ó Ciaráin said that the school is “in the dark” as to when the new school will open, but added that he doesn’t “believe that this thing is going to go on long-term because it wouldn’t in the financial interest of DIF” to prolong the re-tendering process through the summer.

It’s a worry, uncertainty creates a worry always, but I’m sure if they’re not in by 1 September, they will be in very shortly thereafter, purely from a financial aspect.

Collapse of Carillion

Carillion, alongside the Netherlands-headquartered Dutch Infrastructure Fund (DIF), was hired under a Public Private Partnership (PPP) deal reached by the Department of Education and Skills and the National Development Finance Agency.

Immediately following the collapse of Carillion, Sammon entered into negotiations to find a way to complete the contracts and hand over the schools’ buildings without any interruption to the works. Sammon said in a statement that a deal was rejected by funders and the company was instructed to withdraw from the sites involved.

The tender that Sammon held for the schools in question was placed for re-tendering. The re-tendering process was led by DIF on behalf of the PPP contract.

However, in a statement this week, the firm said: “Sammon was in a strong position to win the Schools Bundle 5 PPP contract as a sub-contractor to BAM who had bid for the re-tendering process. Unfortunately, the final decision by the Inspired Spaces consortium on the award of the completion contract for the Schools Bundle 5 contract has been delayed on a number of occasions.”

In relation to the news of liquidation, Sammon group founder and chief executive Miceál Sammon stated that this is a “painful and distressing time” for all those in the business.

“I deeply regret the financial and commercial impact that this development has had on our loyal suppliers and sub-contractors,” said Sammon.

He said the collapse of Carillion and suspension of the school building projects “placed us into a perfect storm”.

We have made every effort from the day Carillion collapsed to get the contract restarted, in the interest of our business, our supply chain and the communities for the schools.

The timing of the new tender award remains uncertain, and schools remain in the dark as to when construction work will be completed and signed off, allowing them to open the doors of their new buildings.

‘I’m optimistic that it will happen soon’

Sharing a similar viewpoint to that of Ó Ciaráin, principal at Loreto secondary school in Wexford town, Billy O’Shea, agreed that he was not surprised to hear of Sammon’s collapse.

“Furthermore, I’m not too sure that it will affect us any further in the sense that we’re aware that the PPP company are in negotiations with another company,” O’Shea said.

“That work has been going on for a couple of months, with companies other than Sammon. The fact that Sammon is no longer involved shouldn’t slow it up any further. All the energy now needs to go on putting in the facilities and the works completion to get the schools open ASAP,” he said.

Loreto’s new school is near completion and ready and waiting for students. However, they cannot gain access until the tendering process is complete.

O’Shea added:

It would be unthinkable that Loreto Wexford would not open in August. It would be absolutely unthinkable because everything is in place.

And, adding to the words of Ó Ciaráin and O’Shea, Emer Breen, principal at St Philomena’s National School in Bray, said: “We have our contingency plans for September and we’ll stick with those. That was our plan for the last month anyway and that’s not going to change for us. I still think we’re one of the schools nearest getting completed, so I’m optimistic that it will happen soon.”

The list of schools affected are as follows:

  • 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 in Kells, Co 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 in Bray in Co Wicklow, which is to be replaced with a new building that can cater for 450 pupils
  • St Philomena’s National School in Bray, where 24 classrooms in the school are to be replaced (both Coláiste Ráithín and St Philomena’s NS will be constructed on a single new site in Bray)

Concern over pay

While schools are becoming increasingly confident that the construction of their new buildings will be completed over the coming months, subcontractors have been left in a state of limbo, with many fearful about whether they will be paid for their work following the collapse.

In January and AprilTheJournal.ie spoke to a number of subcontractors and schools in relation to the impact Carillion’s collapse had on them.

This week, one subcontractor who carried out works on one school said they had hoped to get some of its money owed through the liquidation process.

“We had hoped to get some of the cash for the job but now there is really no chance,” said the company owner.

They said some businesses might now look at removing any goods or works carried out on the buildings in question as property remains the goods of the owner until full payment is received.

TheJournal.ie caught up with Meath TD Thomas Byrne, who has been in contact with a number of subcontractors in his local constituency.

“I was very disappointed, my heart goes out to hundreds of people in my own constituency who work for Sammon and also their subcontractors who have been left in the lurch now,” Byrne said.

“They’re the first priority because the schools will get built,” he said.

In the examinership, they might have gotten a few pennies for every pound they were owed, but it’s likely they’ll get nothing now. It’s certainly possible they will get nothing because of the liquidation.

“That’s obviously a huge blow to a lot of small businesses and that’s to be said all over Ireland. If you look at Kells, if you look at Maynooth, these are massive projects, so there’s a huge range of people who have been badly affected,” Byrne added.

For future construction projects, Byrne said that the government must make sure that there’s “some mechanism in place to ensure the subcontractors get paid”.

Construction progress

In relation to the construction completion of the schools, Minister for Education Richard Bruton told RTÉ Radio One’s Morning Ireland that the State will support the people affected as best it can.

In a statement on Tuesday, Bruton said: “When Carillion Construction Limited went into liquidation in January, their works contract was terminated. DIF, representing the PPP company, and the project funders are now tendering for a replacement contractor or contractors for the completion of the buildings and provision of facilities management services. This process is at an advanced stage. Prior to its liquidation, Sammon Contracting Ireland Limited had formed part of a tender for the completion works.”

Bruton added that the project funders anticipate that the pathway forward to the completion of the Schools Bundle 5 projects will become clearer within the next two weeks.

“The school authorities have been advised of developments in relation to Sammon Contracting Ireland Limited and will continue to be kept updated. It is still the case that the schools which are closest to completion remain best positioned to be finished for September and all efforts are being made to achieve this. The Department is also working with the school authorities on any necessary contingency arrangements for September.”

In a statement to TheJournal.ie, the National Development Finance Agency (NDFA) said: “The NDFA notes the appointment of a liquidator to Sammon Construction Ireland Limited, which was part of a group tendering to provide services to DIF, the contractor responsible for delivering the Schools Bundle 5 PPP project.

“The NDFA recently met with DIF’s funders, Helaba and Bank of Tokyo Mitsubishi, to set out the State’s requirement that these schools be delivered as a matter of urgency and, at a minimum, in line with the deadlines that DIF has previously outlined.

“The NDFA will use all powers available to it under the PPP contract to facilitate the delivery of the schools in line with these deadlines.”

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