Council paid road firm £500k days before collapse
MONEY WAS HANDED OVER JUST DAYS BEFORE COMPANY WENT BUST
MANCHESTER council paid doomed construction firm Dawnus almost half a million pounds just days before they went bust, the M.E.N. can reveal.
The Welsh company slipped into administration yesterday owing creditors tens of millions of pounds.
Dawnus has the lead contract on the Regent Road project to improve junctions near the city centre and ease congestion.
The works began at the end of August and were set to last a year.
Administrators Grant Thornton formally took over nine companies within the Dawnus Group and confirmed all existing work – including Regent Road – will cease.
Around 700 jobs and dozens of civil projects around the country are in jeopardy.
Manchester and Salford councils have been leading the £15m Inner Relief Road Scheme and officials were caught completely off-guard by the problems with Dawnus.
The saga began when sub-contractors downed tools and walked off the site on Tuesday morning, leaving diggers and trucks blocking the roads.
When drivers got out to ask what was going on, workers said the blockade was a ‘protest’ at not being paid.
The M.E.N. later tracked down Tommy Halligan, boss of Trafford Parkbased Total Plant Hire Ltd, who had been supplying machinery to the site.
He told us he is owed around £300,000.
Another sub-contractor who supplied labour claims he is owed a similar amount.
“The problem has been building up since November,” Mr Halligan said. “The payments have been staggered. “Manchester city council made a substantial payment to Dawnus and Dawnus was supposed to pay me last Friday and they never paid me. “They promised me for a week. “Friday and Monday came and no money.”
Manchester council say Dawnus was paid £493,939.17 last Wednesday, the most recent of seven payments totalling £2.65m.
The council say payments were made on a monthly basis after ‘application made by Dawnus to reflect the value of work done. That is normal in the construction industry.’
Mr Halligan has now registered as a creditor of Dawnus but says he does not expect to receive any money.
He says he was also ‘caught for’ large sums of money when construction firms Carillion and Salford-based GPL Group went bust last year.
Manchester council officials have been working on a ‘contingency plan’ behind closed doors all week and now expect to have an alternative contractor lined up ‘shortly.’
A spokesperson for the Manchester-Salford Inner Relief Road scheme said: “There will be Manchester city council workers on site next week to complete preparation works ready for a new main contractor to be put in place and works resuming.
“Contingency planning is well advanced and we hope to be in a position to confirm the full resumption of work shortly, especially now we have had formal confirmation of Dawnus going into administration.
“At this stage we do not anticipate significant delay to the project’s completion as a result of this situation.
“We share the concern of the general public to get this major scheme - which will reduce congestion and improve traffic flow once complete - finished as soon as possible.”
Responding to Tuesday’s walkout, the Mayor of Greater Manchester Andy Burnham called the sub-contractors’ protest ‘arrogant’ and called for police to look into whether any offences had been committed.
He faced a barrage of criticism from many who sided with the workers and their right to be paid.
Mr Halligan described Mr Burnham’s comments as ‘not very nice’ but said they wouldn’t stop him wanting to get back on site.
“I would like to go back and finish the job to try and claw back some of my losses,” he told the M.E.N.
Administrators Grant Thornton said they would do their best to ensure the impact on sub-contractors such as Mr Halligan is ‘minimised.’