Dispute over £6m bill before McGill collapse

Disagreement said to be ‘major factor’ in demise of firm

A dispute over a £6 million bill was “a major factor” in the demise of construction services firm McGill, resulting in the immediate loss of 379 jobs.

Documents released by Scottish Enterprise (SE) through freedom of information legislation show the dispute was one of the major talking points on the firm’s financial situation.

While the documents – primarily made up of email exchanges – have been heavily redacted, a senior source within McGill has confirmed the bill was for a major contract with engineering and construction company Sir Robert McAlpine to build student accommodation close to St Andrews University.

McGill fell into administration earlier this month after SE rejected a £2m loan request and Santander removed the firm’s overdraft facility.

The source, who asked not to be named, said the McAlpine disagreement was the main reason that McGill bosses went to SE for a loan – foreseeing that it would create a cash flow problem in the early months of the year.

Apparently, McAlpine offered to settle the bill for a reduced amount.

They added that McAlpine representatives made regular visits to the McGill offices in January.

The St Andrews University job was to build new halls at the Agnes Blackadder student accommodation.

Work was scheduled to begin in January last year, but delays meant it did not start until March.

However, the end date of September 2018 did not change, as students were due to move in around then.

To ensure the work was completed on time, McGill paid overtime to staff. The source said they had workers on site until about 9pm, seven days per week, in a bid to finish on time.

In the end, the job was completed about 10 days late.

However, McAlpine are then said to have refused to meet the full cost of the bill, saying they did not agree to the payment of overtime beforehand.

One of the released documents, in relation to the St Andrews job, states: “The contract was running significantly late and McGill and other contractors were asked to increase manpower to complete the work on schedule in order for (redacted) to avoid significant penalties.

“McGill indicated it provided the required manpower to complete the job and the job was completed as required – albeit at extra cost.

“McGill claims that (redacted) is delaying payment by challenging and scrutinising job-related paperwork in relation to the amounts claimed.”

The source said the redacted sections refer to McAlpine.

The document also states that McGill management “appear to hold supporting evidence” of the disputed bill.

SE has repeatedly insisted they could not agree to the loan as questions remained over McGill’s turnaround plan and financial stability going forward.

McAlpine refused to comment.

Picture: Dougie Nicolson.