Irish arm of Gama sees operating loss jump to €56m

OPERATING LOSSES at the Irish arm of Turkish-owned construction giant Gama jumped to €56 million last year, according to returns just filed with the Companies Office.

Earlier this year Gama Construction Ireland Ltd told the Labour Court that it projected a loss of €45 million on the Ennis bypass project alone after underestimating the cost of labour and materials and incurring financial penalties for delays.

The accounts just filed for 2007 show the company's turnover slumped by 51 per cent from €81 million in 2006 to €39 million. They also show that cost of sales fell by 22.5 per cent from €111 million to €86 million in 2007.

The firm's operating loss increased by 16 per cent from €48 million to €56 million in 2007. However, an "exceptional gain" of €53 million through the sale of 40 per cent of the company's interest in Tynagh Energy Ltd in December 2007 reduced the end-of-year loss to €9 million.

Accumulated losses at the end of last year were €59 million.

The company's wage bill reduced from €26 million to €14 million, and the number of employees dropped from 373 to 183 last year.

The accounts show that last year no Turkish employees were on secondment to the Irish arm of the group.

In 2005, Edward Nolan, head of the Labour inspectorate of the Department of Enterprise, Trade and Employment, prepared a report into alleged mistreatment of Gama's Turkish workers who were carrying out work in Ireland.

The report was never published following a successful High Court action by Gama.

According to the accounts, the department is still pursuing a Supreme Court challenge calling for its publication. The directors' report notes that Gama is "confident" the "appeal will not succeed".

The company's directors said the company's parent, Gama Holdings AS, has indicated to the group that it was committed to continuing to provide financial support.

"For this reason the directors of the group have a reasonable expectation that the company and the group have adequate financial resources to continue operating for the foreseeable future having regard to the trading prospects and the finance available."