Pretax losses at Gama hit €15m in 2004

Gama, the building company accused last summer of paying its workers between €2 and €3 an hour, lost almost €16 million last year, the latest figures show. Barry O'Halloran reports

Accounts filed with the Companies' Registration Office (CRO) show that Gama Construction Ireland turned over €149 million in 2004, but costs and interest left it in the red for the year.

A combined costs and administrative expenses bill of €160 million resulted in operating losses of €11 million. It also had a €4.54 million interest bill on loans and leases.

As a result the company posted losses before tax for 2004 of €15.7 million, more than three times the €5 million it lost in 2003. It had no tax liabilities.

A positive €1.4 million contribution from its joint ventures in the Republic left Gama with losses for the year of €14.3 million. The accounts list these joint ventures as Gama Tubin, which completed the Ballincollig bypass project in Cork in 2004, Gama Strabag, which began building the Ennis bypass in Co Clare last year, and Tynagh Energy, the company that is developing a power plant Co Galway.

Gama Tubin is likely to have been the biggest contributor, as it was the only joint venture that completed a project. It has since won the contract for the Castleblayney-Clontibret bypass road in Co Monaghan. The company began construction last month. According to the National Roads Authority, the deal is worth an estimated €115 million, although Gama's accounts value it at €50 million. Gama is currently looking for buyers for some or all of its 80 per cent stake in Tynagh. The plant is expected to be up and running early next year. Gama's total deficit for 2004 was €21.3 million. The company refused to comment yesterday on its results.

Earlier this year Gama was the focus of controversy, when 300 Turkish workers claimed that they had been working up to 80 hours a week for between €2 and €3 an hour. Since May, when the dispute came to a head, the minimum wage has been €7.65 an hour. Before then it was €7. Gama said it was paying wages into their bank accounts in Turkey via a Dutch bank, and said they were aware of this. The workers denied this.

The issue went to the Labour Court, which recommended that each get a lump sum of €8,000 for each year of service in respect of lost overtime.

A dispute involving the company and Foster Wheeler, which was the main contractor on the ESB's Shannonbridge and Lanesborough plants, has gone to arbitration "in Finland" according to the directors' report. If Gama wins, this will be worth €8 million to the company.

Gama Construction Ireland is a subsidiary of Turkish building and civil engineering giant, Gama Turkey.