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Blockade threat at Roadbridge project after firm leaves sub-contractors out of pocket 

Credit:  Credit insurer expecting a ‘domino effect’ from receivership | Fearghal O'Connor | March 27 2022 | www.independent.ie ~~

A partially completed ESB and Bord na Móna wind farm in Co Mayo faces the threat of a blockade by heavy machinery as the fallout from the receivership of Roadbridge continues.

Out-of-pocket sub-contractors claimed that a CRH-owned firm has been appointed to replace Roadbridge – potentially leaving mainly local suppliers and sub contractors in the lurch.

The sub-contractors are owed as much as €6m for work carried out at the Oweninny Wind Farm on behalf of Roadbridge, which went into receivership earlier this month with total trade liabilities estimated at around €40m across a wide range of projects.

A number of sources said that Farrans, a Belfast-based subsidiary of CRH, is set to be appointed to complete the wind farm. Farrans declined to comment but a spokesman for the joint venture project itself said the appointment of an alternate contractor was one of the options it was examining.

The sub-contractors already feared they would not get any money from the receivership but now believe they will lose out further if the new contractor utilises its own supply chain to finish the 31 turbine job.

Brian Coogan, CEO of the Irish Plant Contractors Association, said that his members may use heavy machinery in the coming days to create a blockade at the site to stop further work resuming until the matter is resolved.

“The sub-contractors are likely to get nothing back from the receivership but they proposed a very practical solution to finish the job and get paid directly for the work they have done,” said Coogan. “But it is likely now that there will be a complete blockade of the site. Product not paid for that is already in the ground could be removed.”

The threat of blockade at Oweninny comes as a trade credit insurance firm that has covered the losses of a number of Roadbridge suppliers told the Sunday Independent that there had been red flags about the deteriorating situation at Roadbridge for several years.

Trade credit insurer Atradius said that it expects significant impacts across the construction sector and that it was now examining the creditworthiness of suppliers who had a lot of exposure to Roadbridge.

The firm had made the decision some time ago to continue to support Roadbridge suppliers despite the growing risks, said Tony Gordon, risk manager at Atradius. He said that it was likely that about 20pc of the €40m owed to trade creditors would have been covered by some form of credit insurance.

“We would anticipate a domino effect and that other suppliers will fail. There will be an immediate tranche of suppliers that will not survive and other businesses that will trundle on for a while where we will see redundancies and cost cutting because their businesses were geared to Roadbridge.

“We had concerns about Roadbridge going back over a number of years. We received regular updates from Roadbridge on their financial performance and their liquidity and because of the concerns we had we reduced our position over that period of time.”

Roadbridge had a lot of cash tied up in work in progress, which over an extended period caused pressure on its working capital facilities, said Gordon.

“What we were seeing was that they were stretching their trade creditors beyond normal terms. Suppliers were prepared to stretch those terms because there was a feeling in the industry that Roadbridge was too big to fail. A large number of those creditors would not be credit insured and there is no likelihood of them getting anything back through the receivership process,” said Gordon.

At Oweninny, one supplier alone is owed €1.8m and another is owed €1.6m, with others owed smaller amounts.

Mayo Fine Gael TD Michael Ring said that any move to bring in the new contractor by ESB to replace local suppliers before they were paid for their work or product would be “outrageous”.

“It is their work that is in the ground and out of the ground it comes if they are not paid,” said Ring. “It is an absolute disgrace. These are decent hard-working people and they have to be paid now before anyone goes in and takes over.”

A statement from Oweninny Power 2 DAC (OP2DAC), a joint venture between ESB and Bord na Móna, said it was monitoring the situation closely and liaising with the receiver.

“OP2DAC is looking to complete the remaining works as soon as possible and is examining all options including the appointment of a suitable alternate contractor. All procurement guidelines will be followed. Any replacement contractor will be encouraged to engage with local suppliers. OP2DAC is keen to complete this nationally significant project,” it said.

Source:  Credit insurer expecting a ‘domino effect’ from receivership | Fearghal O'Connor | March 27 2022 | www.independent.ie

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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