The Dutch engineering group building the €670 million Luas system in Dublin has called an e.g.m. of shareholders next Tuesday, fuelling rising concerns about its financial health, writes Arthur Beesley.

Ballast Nedam reported a net loss of €105 million in the first half of 2002 on a turnover of €975 million. Its share price has collapsed in recent months, closing on the Dutch exchange yesterday at €2.65, almost half the rate at the start of the year.

Such levels are very low when compared with the firm's all-time high of €29.10 seen in May 2001, raising questions about the condition of the business.

A spokeswoman in London said the e.g.m. was called to produce the results of a strategic review initiated last September. She declined to discuss the review's contents, saying she was subject to stock exchange disclosure rules forbidding the disclosure of information before the e.g.m.

A spokesman for the Rail Procurement Agency, which manages the project, said it had received confirmation from the contractors that deadlines would be met.

While stating that the group had committed millions of euro to the Dublin project, he acknowledged that the agency had sought reassurance after monitoring the decline in its share price.

Disruption in the Ballast Nedam group could lead to yet more delays on the contract, on which construction activity is intensifying ahead of the completion deadline around mid-2004. The group has 900 staff working on the streets of Dublin at present.

It is the biggest of three in the AMB consortium, whose other members are the Italian group Ansaldo and the Australian group MVM. The Rail Procurement Agency spokesman said: "We've have discussion with the consortium and the partners reiterated their commitment to the Dublin project and finishing it in the timeframe required."

Ansaldo manages the project's rail element, MVM is responsible for design, and Ballast Nedam is effectively the building contractor.