'Substantial amount' owed by council over project, firm claims
A civil engineering firm "will take advice on the merits of action" against a Northern Ireland council to claim back "substantial amounts" which it has said it is owed after it was dropped from a major contract following its administration.
Administrators were appointed to Lisburn firm Tal Civil Engineering Ltd in August, just seven months after Tal Ltd also went under, putting 50 jobs at risk.
One of the major projects it was working on was the delayed 'public realm scheme' in Ballymena, run by Mid and East Antrim Borough Council.
Tal Civil Engineering has completed some of the huge infrastructure project, but the council may now have to re-tender for the remaining work.
A report from administrator James Kennedy has now revealed that the council terminated Tal's work, not long after a meeting to discuss the firm's administration.
The report claims that "there remains substantial amounts due in respect of work in progress and retentions on this contract" and it will "seek advice on how best to deal with the amounts outstanding".
Asked how much is outstanding, the council said the issue was "commercially sensitive".
The administrator says in the report that "following my appointment, I met with the local council officials responsible for the Ballymena project.
"At that meeting certain minor points, were clarified and the matter rested with both parties seeking time to consider the position," the report went on.
"In the interim, company staff maintained a presence on site, and continued with minor works. Within a week of the meeting, however, the contract was terminated by the employer, quoting the appointment of an administrator as the reason.
"This is undeniably provided for in terms of the contract. Once again, I will seek expert advice on the merits of taking action (seeking adjudication) but early investigation suggests that this may not be productive.
"There remains substantial amounts due in respect of work in progress and retentions on this contract. Following my appointment, the employers have terminated the contract. I will seek advice on how best to deal with the amounts outstanding."
A spokesman for the council said a "contract between Tal and council, to undertake the public realm works in Ballymena, was terminated as a result of administration on August 24 and one or more defaults, as outlined in a notice issued to the contractor on July 21".
Speaking about progressing the work forward, it said it is "considering a number of options to complete the outstanding work as quickly as possible and with minimal disruption to our town centre users".
In its latest accounts, Tal Civil Engineering had turnover of just under £9m.
Meanwhile, a report from administrators into Tal Ltd shows that around £3.3m is owed to unsecured creditors.
"In the last two years, the company took on several major contracts with housing associations at a time when such contracts were considered to be one of the few significant sources of work for large contractors," it said.
"As a result of the inevitable competition for such projects, margins had been driven down to a level where the contracts were loss-making."