Gama to share €15m in extra payments

Turkish-owned company Gama Construction is to share an estimated €12 million to €15 million in additional payments on top of the original fixed-price contract for work on the Ennis bypass.

In 2004 the Gama Strabag consortium beat off competition from five companies to build the 21km route for a fixed-price contract of €123 million after lodging the lowest tender with Clare County Council.

However, it has emerged that the contractor is set to get up to €138 million in total as a result of successful contractual claims.

It is believed that Gama Strabag has received an additional €6 million under a section in the contract dealing with "labour laws" and another €6 million under a section relating to "lands made available".

A spokesman for the National Roads Authority (NRA) would only confirm that Gama Strabag has received additional money, but would not confirm the amounts.

The initial price put on the scheme by the council was €191 million and the NRA spokesman said the scheme would come in on budget on the contingency cost of €205 million.

"The contingency cost includes inflation and claims that the contractor would make during the life span of the scheme in response to agreed-upon contractual conditions."

Along with the €123 million fixed-price contract, the remainder of the costs would go towards consultants, archaeology and compulsory purchase orders (67 landowners along the route received €22 million in payments).

The making of claims is commonplace in road contracts.

In relation to the second phase of the Newmarket-on-Fergus bypass that will link up with the Ennis bypass on the N18, claims totalling €19 million were made. However, this was reduced through talks with Clare County Council.

Cllr Joe Carey (Fine Gael) said yesterday it was unfortunate that Gama had made the claims.

"I hope that these pay-outs would not hinder the completion of the scheme in any way. We were led to believe that design-build-operate contracts like the bypass would be more economic . . ."

County engineer Tom Carey said all payments made to the contractor on the Ennis bypass were in accordance with the contract documents.

He said the scheme was on schedule for completion in April. However, it was hoped to open sections ahead of this date.

Gama is aiming to have the eastern phase of the bypass opened by the end of this year.

This would relieve Ennis of bottlenecks and remove the need for motorists travelling from Galway to Limerick to drive through Ennis.