CLG and Balfour Beatty joint venture wins €500m contract with Bord Gáis

MULTINATIONAL ENGINEERING group Balfour Beatty and local player CLG Developments are poised to take up a €500 million contract with State utility Bord Gáis in the new year.

The joint venture has won a nine-year construction and maintenance contract with State gas company Bord Gáis Networks that is valued at almost €500 million over its lifetime.

It will take over responsibility for installing new pipes, regular maintenance of the existing network and emergency response from a group of around 10 existing contractors.

The contract covers the network that supplies natural gas to homes and businesses but does not cover the larger cross-country pipes. Bord Gáis tenders for work on these on an individual basis.

The joint venture is due to begin work early in 2012, but there will be little or no change of personnel on the ground as the engineers and technicians involved will transfer to the new entity.

CLG, which has a long-standing relationship with Bord Gáis, will be responsible for the day-to-day work.

According to a Bord Gáis spokesman, Balfour Beatty, which is bringing in a team of five staff to work on the project, will be responsible for “management and innovation”.

The competition for the contract, which was advertised in the EU Journal, attracted a number of international bidders and ran for several months.

The CLG-Balfour Beatty consortium was known to have been one of the front-runners for the contract for some time.

Dublin law firm LK Shields represented the winning joint venture. Its former managing partner, Larry Shields, is a director of Bord Gáis, but he stepped aside from playing any part in the process to avoid any conflict of interest. Mr Shields recently announced his retirement from the firm.

This will be the first time that Bord Gáis has awarded a single contract for this work, which has traditionally been carried out by a number of companies operating on a regional basis.

The State company expects to save between 5 per cent and 10 per cent a year over the life of the agreement as a result of awarding the contract to a single entity.

Balfour Beatty is a British-based group that employs around 50,000 people worldwide. It specialises in the design, construction and maintenance of infrastructure. It had €6 billion in revenues in the first half of this year.

Chief executive Ian Tyler yesterday described the Bord Gáis award as a significant development for its international utilities business.

CLG Developments is based in Clondalkin, Dublin, with offices in Cork, Limerick and Britain. The company specialises in large-scale construction, engineering, infrastructure and utilities. Its clients include a range of local authorities and State bodies such as the Rail Procurement Agency and the Irish Prison Service, as well as Bord Gáis and the ESB.

The group made profits of €204,000 on a €35 million turnover in the 12 months ended June 30th last year, according to its last set of accounts. Its net assets fell just short of €16 million.