Scrapped NI build deal costs £5 million

2 March 2009

02 March 2009 | Andy Allen

Procurement has been criticised after the collapse of a programme to transform public buildings in Northern Ireland cost taxpayers up to £5 million.

Northern Ireland's Department of Finance and Personnel (DFP) confirmed to supplymanagement.com it had scrapped the tender process for a project to modernise its property.

A DFP spokesperson said between £4.5 million and £5 million of the £8 million spent so far on consultancy and professional services would go to waste. The department blamed the poor state of the property market for the decision.

Before closing the process, the DFP also came under fire when one of the two remaining bidders for the work, Telereal, acquired the other, Trillium, from parent firm Land Securities.

Declan O'Loan, a Social Democratic and Labour party member, said: "The process should have been suspended immediately it became clear there was a prospect of a merger or acquisition between the two remaining bidders for the Workplace 2010 contract.

"The department was warned by myself and others that this was a very worrying situation. It must now be thoroughly investigated."

The DFP said: "While the merger was a potentially significant complication it was not the reason for the termination."

It said the current state of the credit markets and the fall in property values had changed the planned terms of the deal. Under the original plan the winning bidder would have bought civil service property and leased it back after modernising it.

The department confirmed it would hold an evaluation to learn lessons from the process. It said it still intended to go ahead with a similar scheme when economics conditions permitted.

SMmar2009

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