Marcella Corcoran Kennedy (Offaly, Fine Gael) | Oireachtas source

Inspired Spaces was the joint venture between Carillion and a Dutch infrastructure fund. The joint venture won the contract to build and manage the schools. A Carillion subsidiary was engaged to build, which in turn subcontracted to Sammon. This means a number of steps are in place before we get to the level of subcontracting to the local small and medium-sized enterprises.

I wonder about due diligence. When the financial close on schools public private partnership, PPP, bundle 5 was signed off, the project and financing agreements were signed and all the conditions contained had been satisfied by all parties. That occurred on 22 July 2016. On 10 July 2017, less than one year later, Carillion issued a trading update warning that it had £1.15 billion in losses by June 2017. If this was revealed, how is it that there was no indication of it in July 2016 when the contract had been awarded? Surely some kind of red flag should have been raised.

I have received some information from the Department on the matter. Is it wise that the public private partnership companies in receipt of the tenders are not due payment for the construction of the schools until they are handed over? It is no wonder that all these subcontractors are expected to fund operations at local level. It is their overdrafts that are being called on to provide the materials and labour. It is grand for a contractor to get a contract if the company does not need to have overdraft facilities in place and can use those of a subcontractor. The real problem seems to be the fact that no funding is handed over until the school is completed. Where is the funding to come from if the main company, in this case, Inspired Spaces, does not have the funds in place to deliver on the project in the first place? That is a significant issue and warrants further examination.

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