Construction of the €60 million Cork School of Music are likely to be delayed further following the announcement that the development company will sell the division that handles its public-private partnerships, writes Barry Roche.
K-based Jarvis plc said yesterday it would sell its Private Finance Initiative (PFI) bidding operations, which won the contract for the new Cork School of Music, to French-based multinational Vinci Investments. The move is part of Jarvis's restructuring strategy after posting losses of £255.7 million (€371.7 million). The value of the sale was not disclosed.
Jarvis said the terms of the sale anticipated the appointment of a Jarvis team to carry out the facilities management stage of the Cork School of Music. The company has agreed to build, equip and maintain the school for 25 years at a cost of €8.2 million per annum to the State.
Jarvis Projects Ltd's Mr Pat Gardiner said yesterday that bringing Vinci on board would help assure Jarvis's bankers, Barclays, and the Department of Education. Vinci was in a strong financial position and would take over the contract which would still involve Sisk Construction building the new school, he said.
A Department spokesman was more cautious, however, pointing out that the agreement between Jarvis and Vinci was conditional on due diligence and completion of documentation. He said if it went ahead, the Department would exercise similar due diligence before signing the contract with Vinci.
He said the Government would have to take legal advice and consult the EU Commission to ensure that the manner in which Vinci had taken over the school contract was in line with EU procurement regulations.
"There's no question of us renegotiating the contract with Vinci - we're committed to the Cork School of Music but we're not going to be rushed into this because we want to get it right. We're talking about tax-payers' money so we have to be sure everything is okay."
He said the Department only learned of this latest development when Jarvis issued a statement yesterday morning. The newly appointed Minister for Education, Ms Hanafin, had not been aware of the move when she made a statement on the Cork School of Music on October 5th in response to a question from Fine Gael's Mr Bernard Allen.
Mr Allen said the Department was clearly not "on top of situation" if they were unaware then of the Vinci deal. He urged Ms Hanafin to use public money to press ahead with the school plan, as students and teachers were operating in overcrowded temporary accommodation at various locations in Cork.
Cork School of Music lecturer Mr Gerry Kelly, who led the campaign for the school, expressed disappointment. However, "it's gone so far now that it's politically impossible for it not to happen", he said.