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Companies face knock-on effect as builders struggle

The owner of a construction firm in Co Antrim says the future for smaller supply chain companies in Northern Ireland looks grim following yet another of his main contractors going into administration.

In the last three years Kevin Henry of K Henry Construction, which specialises in making reinforced concrete frames for buildings, said his firm has lost up to £170,000 because of main contractors going bust.

The firm, which was established in 1989 in Armoy and employed 130 people at the height of the property and building boom, now employs around 35 people in total.

Mr Henry said that the Patton Group, which announced on Tuesday that it is entering administration, owes his company around £15,000 for work on the new Belfast Metropolitan College.

"We have had main contractors such as Kennedy Contractors Ltd for the St Anne's Square development, P Elliott -amp; Co. Ltd for The Boat and the Bowen Mascott joint venture on the new MAC theatre, all withholding valuation payments and retentions, then eventually declaring themselves bankrupt resulting in losses of around £170,000 to my company.

"The Patton Group for whom we carried out the formwork at the new Belfast Metropolitan College currently owes us around £15,000.

"They all say they haven't been paid by the client so therefore they cannot pay their sub-contractors.

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"This of course is not a valid reason for non-payment as the sub-contractor's contract is with the main contractor and not with the client.

"We do consider ourselves lucky though. We can cope with smaller losses but some people are owed much more and face going to the wall. If Patton had got into difficulty this time last year when we were working on their Primark project in Scotland, we would be owed nearly £160,000.

"I cannot see any recovery in the Northern Ireland industry for the next two years.

"We have been targeting work in the Isle of Man and Scotland and while that may incur extra expenses, the work is there and the money is being paid for the work that we are doing."

Late last month Finance Minister Sammy Wilson introduced legislation as part of an update of the Construction Contracts (Northern Ireland) Order 1997 which could see main contractors who fail to pay supply chain companies being banned from tendering for future government work.

Speaking in the Assembly, Mr Wilson said that construction accounts for more than £1.3bn of the total spend each year with 96% of all construction contracts awarded by the Executive going to local companies.

John Armstrong, managing director of the Construction Employers' Federation (CEF) said that slow and non-payment is crushing smaller firms.