Public construction ceases as Cordil says State owes it €4m

GALWAY-BASED Cordil Construction has suspended work on all of its civic projects, including schools and social housing, due to “cash-flow problems” exacerbated by delays in payments from Government departments.

School building works in Dublin, Limerick, Roscommon and Galway have been put on hold by the company, 50 staff have been temporarily laid off and a further 400 subcontractors have also been affected.

Cordil said it is owed up to €4 million for work already completed for the State.

The group has temporarily suspended work on projects including Blackrock Library, Old Town Hall and Senior Vocational Education College in Co Dublin; Scoil Mhuire, Strokestown, Co Roscommon; Ard Scoil Rís, Limerick city and Coláiste Iognáid, Galway city.

Work on St Colman’s care centre on Achill Island and Clár ICH housing at Claremorris, Co Mayo has also been suspended.

Cordil Construction, which has 15 projects around the State worth €27 million, said its cash-flow problem began when projects were affected by severe weather in December and January.

It said the new public sector contracts required companies to finance projects for up to 10 weeks and agreeing and signing off on final accounts was “a protracted affair” that could take “several months”. It was also difficult to get paid for variations and extras in a timely fashion.

Gerry Dillon, managing director of Cordil, said it had sought an overdraft to secure funding ahead of being paid by the State. It had also contacted various Ministers and officials to secure support for the funding request and to “ensure that the payment of monies owed is released without further delay”.

He was extremely concerned for staff, their families and in particular, suppliers and contractors.

A spokeswoman for the Department of Education said all payments due under contracts had been paid to date. The Department of the Environment said the last claim received for the Claremorris housing project was in November 2010 and it was paid.

The HSE said the executive was “not made aware until recently of the contractor’s dissatisfaction with the fixed-price contract process”.