Fears for schools as builder Sammon is liquidated

Uncertainty over whether builder Sammon would be appointed to finish a €100 million schools construction project forced the contractor into liquidation with the loss of 200 jobs.

The news comes amid fears that work on the schools will not be finished before they are due to open in September.

Separately, Richard Bruton, Minister for Education, confirmed that the liquidation also means his department must hire a replacement for Sammon on a second contract to build two secondary schools for 1,000 pupils in Maynooth.

Michael McAteer, managing partner of Grant Thornton, appointed examiner to Sammon Contracting Ireland Ltd in April, asked the High Court yesterday to wind up the company. His colleague Stephen Tennant takes over as liquidator.

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Sammon had hoped that a joint bid with another builder, BAM, would win a contract to finish work on six schools that stalled in January following the £7 billion collapse of UK giant Carillion, one of the partners in the project.

However, delays by the other partner, Dutch Infrastructure Fund (DIF), in appointing a new subcontractor led to uncertainty over whether the bid would succeed, forcing the examiner to seek Sammon's liquidation.

Critical

Winning the contract was critical to rescue plans for Sammon, which sought High Court protection from creditors in April. Potential investors, including developer PJ McGrath, would only have come on board if it succeeded.

Work on the schools should have restarted on June 1st. DIF was due to hire a new subcontractor by April 28th. The Dutch fund said yesterday that it was assessing options for the contract.

The State's National Development Finance Agency (NDFA) – which is overseeing the project – confirmed that it recently met DIF's lenders, German bank Helaba and Bank of Tokyo Mitsubishi, to warn that the schools be built "at a minimum" in line within deadlines agreed by the Dutch fund.

The DIF-Carillion joint venture, Inspired Spaces, originally hired Sammon through one of the UK group’s subsidiaries to build the schools. Following its collapse, Carillion owed €8 million to Sammon, which was left with no cash.

Other builders, including JJ Rhatigan and Sisk, are bidding to finish the work on the five schools and institute of education in counties Carlow, Meath, Wexford and Wicklow that make up the Inspired Spaces project, known as Schools Bundle 5.

‘Additional offers’

DIF said that it received several bids in April. “Following a review of these quotes, additional offers were asked from other contractors in order to improve the number of options,” the company said. The fund added that it was working with the Department of Education and NDFA to finish and operate the schools.

Mr Bruton said the Maynooth schools were due to be finished in May 2019. He added that his department would seek bids to complete this work.

Sammon’s founder and chief executive, Miceál Sammon, said it was a “painful and distressing time” for staff, management and his family.

One part of the group, Miceál Sammon Woodcraft, may be saved if creditors accept a scheme to be put to them in the next two weeks.