New rivals to build and run schools left unfinished after Carillion collapse

State’s National Development Finance Agency says schools and Institute of Education must be ready for new academic year

The  British group Carillion collapsed owing  £7bn  to creditors. Photograph: PA Wire

The British group Carillion collapsed owing £7bn to creditors. Photograph: PA Wire

 

Builders BAM and Sammon face competition from rivals including JJ Rhatigan and Sisk to build and run six schools left unfinished by the collapse of British group Carillion.

Work stalled on the construction of five schools and an Institute of Education after Carillion, one of the partners in the project, went to the wall, subsequently forcing Irish sub-contractor Sammon to seek protection from creditors.

JJ Rhatigan and Sisk, facilities manager Sodexo and possibly other players are in the running to finish building and to maintain the schools in competition with a joint bid from BAM and Sammon, named as front-runners for the contract.

News that several bidders are in the race follows a recent meeting between the State’s National Development Finance Agency (NDFA), which is overseeing the project, and its lenders German bank Helaba and Japan’s Tokyo Mitsubishi Bank.

The State agency is understood to have stressed to the banks that the schools and Institute of Education must be ready for the start of the new academic year in September, the date on which they are scheduled to open.

BAM was named as the likely winner of the contract at a High Court hearing last month that confirmed the appointment of an examiner to Sammon, which lawyers said would be hired to complete work on the schools.

Developer PJ McGrath of the McGrath group has expressed interest in backing a rescue plan for Sammon which is continuing to trade.

‘Complex process’

A spokesman for BAM said on Monday: “Discussions are ongoing in what is a complex process”, indicating that the partnership is still in the running for the work.

The contract involves both building the schools and taking responsibility for facilities management – that is maintenance and other services – for 20 years after construction.

According to sources, BAM would hire Sammon, which was originally contracted to build the schools, to finish the work, while it would take charge of facilities management.

Sodexo, a specialist in facilities management, is bidding for this element of the deal, while JJ Rhatigan and Sisk are candidates to finish construction. Sources say an unnamed Scottish contractor may also have expressed interest in the work.

Specialist investor Dutch Infrastructure Fund (DIF), Carillion’s partner in the original contract, is responsible for hiring whichever businesses will finish and manage the buildings. It sought bids for the work in April.

The NDFA does not have a view on which bidder should get the work once it is completed on time. DIF has said it is committed to ensuring this happens.

Delay

Staff in the five schools and the Institute of Education in counties Carlow, Meath, Wexford and Wicklow fear the delay, dating back to Carillion’s liquidation in January, could prevent them opening on time.

Inspired Spaces, owned by Carillion and DIF, originally won the €100 million schools contract from the State. Helaba and Tokyo Mitsubishi Bank were providing the finance.

Inspired Spaces hired Irish group Sammon Contracting through another Carillion subsidiary to build them, a deal that ended when the UK group folded owing £7 billion (€8bn) to creditors.

The High Court appointed Michael McAteer of Grant Thornton as examiner to Sammon, owed €8 million by Carillion, last month.