Road works in Poland lead to dead end for Siac and Sisk

[discostu]

Don’t go east young man

irishtimes.com/business/sect … GY.twitter

[wii4miinow]

From the same link above:-

It was a culture shock from Ireland where, he says, the National Roads Authority (NRA) resolves disagreements quickly and behind closed doors.

NRA.

We’ve spoken about them here before. And we know how the system works here in Ireland. Here it is, out in the open, disagreements are dealt with privately behind closed doors.

[songster]

quote. Sources familiar with public contracts in Poland say that, after post-communist years marked by cronyism and corruption in public life, the pendulum has swung the other way with an acute fear in public bodies of making decisions – particularly involving large infrastructure projects.

Mr Sullivan says this reflects his experience dealing with GDDKiA. Rather than seek an amicable solution, he said, officials preferred to let courts decide.

It was a culture shock from Ireland where, he says, the National Roads Authority (NRA) resolves disagreements quickly and behind closed doors.quote

Wow Just Wow… You see ye cannot bate that cronyism and corruption… begorrah!!!

[Carrot_and_stick]

From the same link above:-

It was a culture shock

from Ireland where, he says, the National Roads Authority (NRA) resolves disagreements quickly and behind closed doors.

NRA.

We’ve spoken about them here before. And we know how the system works here in Ireland. Here it is, out in the open, disagreements are dealt with privately behind closed doors.

Actually its arbitration first then the courts.
Arbitration is a much more efficient way of dealing with Contract disputes.

[Poacher]

From the comments section…sounds plausible…

So I’m guessing what actually happened is… Sisk won the contracts by under bidding everybody, then when the projects went over budget (surprise surprise) the polish government refsued to just keep throwing money at them… unlike in ireland where the lowest bidder (who has connections and brown envelopes) gets the contract and then the publics money just keeps getting thrown at contracts till they’re finished… fair play to poland - fixed price contracts are FIXED price.

irishtimes.com/business/sect … 24?page=2#

[Poacher]

…and from a separate article in the same edition of the same newspaper, relating to one of the same companies…no wonder they’re homesick…

Building group Siac received millions of euro from the State for completed road projects ahead of seeking court protection from its creditors.

The High Court placed Siac Construction Ltd and eight related companies in interim examinership this week, giving them protection from creditors, including sub-contractors and suppliers owed €26 million, along with three banks owed €42 million.

It emerged yesterday that Siac recently agreed and was paid final instalments on two major road projects paid for by the taxpayer and is in talks in relation to a third.

Road works in Poland lead to dead end for Siac and Sisk

It agreed a final account for the M1 widening in Dublin with Fingal County Council, which was advised by the National Roads Authority (NRA), and completed talks in relation to that project last week.

Final payment
It has been reported that the final payment agreed for the M1 was as much as €12.5 million, but other sources have said it was much less than this, and would have been closer to €3 million.

Shortly before, the group agreed a final payment with the local authority for work on the N4 between Clongowney and McNead’s Bridge in Co Westmeath, which opened last May.

It is in the process of hammering out a final account for work done on Cork’s southern ring road with both Cork Corporation and County Council. That project had an overall value of €21.7 million.

The company did not comment on any of this directly, but pointed out yesterday that it has a turnover of about €100 million a year, and said in that context, “turnover last week was average”.

Unsecured creditors who worked on projects such as the M1 say that they have been waiting for six months or more to be paid and were regularly told by Siac’s representatives that they would receive the money due once its clients had been paid.

A number of unsecured creditors are considering opposing any further extension of the court’s protection or examinership when the matter goes to a full hearing in the High Court on November 6th.

irishtimes.com/business/sect … -1.1572578

[grumpy]

From the comments section…sounds plausible…

So I’m guessing what actually happened is… Sisk won the contracts by under bidding everybody, then when the projects went over budget (surprise surprise) the polish government refsued to just keep throwing money at them… unlike in ireland where the lowest bidder (who has connections and brown envelopes) gets the contract and then the publics money just keeps getting thrown at contracts till they’re finished… fair play to poland - fixed price contracts are FIXED price.

irishtimes.com/business/sect … 24?page=2#

No it’s not what happened.

Materials went up in price as they started constructing a massive road network. Plans were bad requiring variations. Most of the Irish companies partnered up with local Polish firms who took the financial loss and went bust. Sisk put in it’s own working capital.

This is a big problem in Poland and construction contracts generally. The stadium for the final of the Euro football championships had tens of thousands of agreed variations that they wouldn’t pay for and the contractor (Spanish I think) took a huge loss.

[conork]

Worked with sisk on a joint venture project, the other contractor went bust and sisk took a hit. I generally thought sisk were a decent company in comparison to some of the other large companies.
I had also heard a few years ago that they were struggling with the road projects in Poland as the local suppliers were charging sisk over the odds for materials cause they weren’t local.
Worked with siac on another joint venture and I had a few contractors chasing payment of retention, they were working with ferrovial so not sure who was to blame as such

When I say working with them, I was working part of a design team on the projects

[September]

Also Alpine Bau which is one of biggest companies in Austria took a hit uk.reuters.com/article/2013/10/2 … 5820131024

Numerous of Polish companies also went bust.

[KOR101]

What caught my eye was…

“The NRA in Ireland sees that what is good for the contractor and good for job is good for the NRA and the country,” he said (Paul Sullivan of Sisk).

[Negative_Covenant]

It is defintiely preferable that construction diputes should be resolved confidentially between the parties rather than through arbitration or litigation. That is why many standard form contracts have conciliation built in. Arbitration is as almost as bad as litigation. Arbitration is certainly not a productive way to resolve a dispute.

Also, if the Irish government owed money to SIAC then it shoudl pay it so it is in the pot for employees and preferential creditors. Not paying somebody because that person is going bust is theft pure and simple. The suggestion that the state shoudl have opportunistically robbed SIAC is ridiculous. The headlines if the Government had not made payment and the contractor had gone bust causing job losses would have been a lot worse.