Irish builders dispute council’s decision to walk away from contract to build new high school

Services committee chairman Gussie Angus. Click on image to enlarge.
Services committee chairman Gussie Angus. Click on image to enlarge.

The SIC is in dispute with building contractor O’Hare & McGovern over its decision to walk away from an agreement with the Irish firm to build the new Anderson High School.

After the decision to switch from the Knab site to the lower Staney Hill was taken in August, SIC executive director of services Hazel Sutherland stated that either party had been free to walk away from the deal at any time – a stance reasserted by head of legal Jan Riise this week.

But the company’s managing director Eamon O’Hare disputes that position and believes his company has a deal to build the school regardless of where in Lerwick it is to be situated.

The SIC says it has not severed ties with O’Hare & McGovern entirely because the firm will be entitled to apply for the tender to build at the lower Staney Hill like any other building company.

Persistent rumours have been circulating that O’Hare & McGovern had been on a significant monthly retainer over the summer while an independent review was carried out into where the school, estimated to cost up to £49 million, should be sited.

The council has outrightly denied that on several occasions, stating that because O’Hare & McGovern had been employed on an early contractor involvement (ECI) basis the contract could be severed without any cash – other than for work already carried out – being handed over. The Irish firm had been just days away from getting on site at the Knab before councillors’ last-minute decision in late June to order a rethink.

Mr O’Hare said this week that, as far as he was concerned, the position was quite simple: “We still have a contract with the SIC to build a school for them. It has always been our understanding that we had the contract to build the school anywhere in Lerwick – some of the council officials would have agreed with that.”

Services committee chairman Gussie Angus told The Shetland Times: “The lawyers are, as we speak, negotiating that. It’s whether or not an asset has been created – and of course it hasn’t. He claims he’s got a contract to build a school in Lerwick; the council is disputing that.

“We hope we can come to a resolution. I suppose in any dispute about legal matters you could end up paying. Our legal advice is that we shouldn’t have to pay out anything.”

Mr Riise said he was restricted in what he could say publicly on the matter, but admitted that there was the possibility of a claim being submitted against the council.

“It’s a contract that any party can sever at any time,” he said. “If we don’t resolve that difference, we could potentially be subject to a claims process. Our lawyers are looking at that question and representations have been made to us.”

Meanwhile, following last month’s decision to shift to the lower Staney Hill – following an unprecedented revolt from members of the public opposed to the Knab site – councillors are told in a report by Ms Sutherland going before Thursday’s services committee that drawing up a design brief alone could take until the new year.

The brief is to be revised with the help of expert educational experts and Architecture + Design Scotland (A+DS) are to be engaged at an early stage this time around. Preliminary site investigations drawing on previous site surveys are also to be carried out this side of Christmas.

Mr Angus said it was important to be able to “spring into action” as soon as possible. “We want to get on with it as quickly as we possibly can. If I had my way we’d be well on the way to appointing somebody [before Christmas]. There’s nothing we can do before the services committee; depending on decisions there we can or can not spring into action.”


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