State agency to meet schools over Carillion collapse

State finance agency to discuss progress after Irish contractor Sammon called in examiner

Carillion went to the wall owing £7bn to creditors, making it one of the biggest failures in the history of British construction. Photograph: Getty Images

Carillion went to the wall owing £7bn to creditors, making it one of the biggest failures in the history of British construction. Photograph: Getty Images

 

The State agency responsible for overseeing public building projects is due this month to meet some of those caught in the fallout from British construction giant Carillion’s collapse when work stalled on several Irish schools.

Building was halted on five schools and an institute of education in counties Carlow, Meath, Wexford and Wicklow in January after Carillion’s liquidation forced the British group’s local sub-contractor, Sammon, to stop work as it was no longer being paid.

It is understood that the National Development Finance Agency is due to meet staff and others involved in the schools in the middle of May to discuss progress on the projects.

The agency hired Carillion and its partner, Dutch Infrastructure Fund, on the Department of Education’s behalf. They in turn, employed a Carillion subsidiary to build the schools, and that company sub-contracted this to Sammon.

The High Court recently appointed Michael McAteer of Grant Thornton as examiner to Sammon, which allows the Irish company to continue trading while it puts together a rescue plan for the business.

The court heard last month that developer PJ McGrath, of the McGrath Group, is prepared to rescue Sammon.

Dutch Infrastructure Fund is seeking a new contractor to complete work on the schools. It is due to finish this selection process shortly, and has already pledged that the buildings would be ready for the new academic year in September.

As Sammon has done most of the work on the schools, it is likely that the company will be involved in preparing them to open.

Carillion owes Sammon €8 million, which the Irish group does not expect to recover. The UK business had been paying the company every month, and its collapse left Sammon without vital cashflow.

Carillion went to the wall owing £7 billion to creditors, making it one of the biggest failures in the history of British construction.