Hi °C | Lo °C The sale of 65 government buildings in Northern Ireland has been put on hold until next year, it was announced today.
The Department of Finance and Personnel (DFP) decided to delay the privatisation process, worth an estimated £2bn, because of fears taxpayers will lose out.
Rival companies who have already bid for the properties, which include Dundonald House in the Stormont estate in Belfast, could merge and buy at a cheaper price, it was claimed.
Workplace 2010 would transfer ownership to a business, in exchange for a long-term lease to the civil service, with the successful contractor responsible for maintenance and other services like cleaning and security.
A departmental spokesman said: "This decision has been taken as a result of continuing speculation that both bidders could come under common ownership, which has the potential to affect the Workplace 2010 procurement.
"The suspension (until early 2009) will also give the department time to assess the impact of recent changes in the financial and property markets."
Some older buildings to be sold are in a poor state of repair. Premises would include the Department of Agriculture's Dundonald House and other parts of the Stormont estate.
Both bidders, land Securities Trillium and Telereal, submitted their final offers in June. They are in a tendering process aimed at obtaining the best deal for the taxpayer.
Land Securities Group, owner of LS Trillium, is evaluating a sale of LS Trillium and there is concern both bidders could end up with the same owner.
The procurement process will be reviewed in January.
The winner will be responsible for a major refurbishment programme for a range of buildings.
Maintenance for the lifetime of the contract and related services will also be required.
NIPSA civil service union general secretary John Corey called on the Department and Executive to undertake a fundamental review of the whole project.
"NIPSA has warned many times of the dangers and folly of this PFI project which was going to cost taxpayers dearly in the future.
"Over the last few weeks we have made intensive representations to the department to stop the tender negotiations as it had become increasingly clear this PFI project was not viable."
Sinn Fein Assembly finance committee chairman Mitchel McLaughlin said the suspension was the only viable option.
"The projected receipts from the sale of government assets had already been downgraded before the start of the fall in property prices.
"On top of that they were some very serious questions being asked about the bidding process."
He called for a review of the entire process.
"The capital realisation taskforce had projected that Workplace 2010 would generate some £175 million for the Executive but it would appear that Nigel Dodds is now left with a huge headache that will impact on the current spending plans of all departments.
"Nigel Dodds needs to explain, in advance of the next in-year monitoring round, how he will deal with this hole in his financial projections."
SDLP MLA Declan O'Loan said the process should have been suspended as soon as there was any prospect of a merger.
"The department was warned by myself and others that this was a very worrying and disturbing situation and it must now be thoroughly investigated," he added.
