Carillion collapse: Howlin raises issue with Taoiseach in the Dáil

Labour Party leader and Wexford TD Brendan Howlin, has raised the urgent need to provide for the opening of Loreto College Wexford with the Taoiseach during Leaders’ Questions in the Dáil today, in the wake of the collapse of UK company Carillion.

Deputy Howlin commented:

“This project began when I was Minister for Public Expenditure and Reform, and is a magnificent new facility that is urgently required by the girls of the Loreto.

“I will continue to press to ensure that this facility is made available as soon as possible.”

ENDS

NOTES TO EDITORS

Transcript of Deputy Howlin’s LQ and Taoiseach’s response today:

Deputy Brendan Howlin: Last Friday, I visited the completed Loreto college in Wexford town.  It is a fantastic facility.  We were told that pupils would be occupying the building yesterday.  It is one of six schools in the schools public private partnership, PPP, bundle 5.  Of these schools, 90% are complete and a couple are in turnkey condition.  The principal of Coláiste Ráithín in Bray has said he was due to receive the keys of his school on Monday.  These schools were built by InspiredSpaces, a joint venture involving a 50-50 partnership between Carillion and the Dutch Infrastructure Fund.  After financing and building the schools from its own resources the joint venture would receive payments over 25 years. Under the terms of the partnership, it is my understanding that it falls now to the Dutch Infrastructure Fund to deliver on that contract.  The PPP company appointed Carillion Construction to deliver the buildings and it, in turn, subcontracted to Sammon, which has built the schools.

 Last week, I was assured by the National Development Finance Agency, NDFA, that the PPP contract was so robust that there would be no interruption in the scheduled opening of these schools.  Yesterday, everything changed.  Teachers who were physically bringing in teaching equipment to the buildings were denied access.  In Wexford, 700 pupils and their teachers, special needs assistants and other support staff were given firm assurances by the Department of Education and Skills and the NDFA that they could move into the school yesterday.  Instead, the site was shut down.  The school had to seek permission to retrieve teaching equipment that had been moved on site so that it could continue to operate in the old school building.

I understand the complexity of PPP agreements.  I was assured that one of their attractions is that the State is guaranteed speedy delivery of buildings and that, because such arrangements are watertight, public moneys would not be at risk.  The Wexford and Bray schools are ready for occupation.  Whatever outstanding issues have to be resolved so that the legitimate expectation of the Irish people and, more especially, the school communities at those six sites must be resolved immediately.  The State is the owner of these schools and will fund the projects over the next 25 years through unitary payments and the PPP system.  When will teaching begin in Loreto college Wexford and at each of the other sites involved?

The Taoiseach: This is a very important issue and a matter of enormous concern to the six schools affected.  The schools are located at four sites in Wicklow, Wexford, Meath and Carlow.  They are all replacement schools.  The existing schools are still available but we want people to be able to move into the new facilities as soon as possible.  It will take a couple of weeks to sort this out.  We will sort it out.  We are in strong position.  The schools are 90% complete.  The State owns the buildings and the payments made so far by the State to the PPP contractor are of the order of €4 million to €5 million.  It costs much more than that to build one school, let alone six, so we are in a strong position to have this sorted out but because of the collapse of one of the partners it will take a few weeks to conclude matters.  Even if this was not a PPP, a similar situation could just as easily have arisen with a traditional construction contract where a contractor or private company building a school or any building could go bust and enter into liquidation.  We are confident that we will have this sorted out within a few weeks.  The NDFA and the Department of Education and Skills are very engaged in respect of this matter.

Deputy Brendan Howlin: The selling point for PPPs is that if one of the partners collapses, then, legally, the remaining partner must take on the responsibility.  In this case, that is the Dutch Infrastructure Fund, one of the largest conglomerates in Europe involved in PPPs.  This will involve serious reputational problems for it and it will be anxious to resolve this matter, so I was assured last week.  Why is there not a proactive move on the part of the NDFA and the Government to ensure that the remaining partner, the Dutch Infrastructure Fund, meets its legal obligations immediately in order to ensure that the timeline agreed with these school communities will be fulfilled and that the facilities can be occupied?  The NDFA and the Government cannot be passive onlookers; they must be proactive.  I ask the Taoiseach to give instructions to the NDFA to ensure that this is done.

 The Taoiseach: I can absolutely give Deputy Howlin that assurance.  The NDFA and the Department of Education and Skills are very much involved.  We will do everything we can in the next couple of days to have this issue resolved in a matter of weeks so that the children and their teachers can move into these fabulous new school buildings.  We have a statement from the Dutch Infrastructure Fund explaining that the collapse of its partner happened more quickly than expected and that said collapse came as a surprise.  It also says that its top priority is to resolve this complex situation as quickly as possible.  There will be a delay while it deals with the subcontractors and other stakeholders in the project.