Sunday 23 March 2008

Controversial firm Gama lost €45m building Ennis bypass

A CONSTRUCTION firm accused of exploiting migrant workers in Ireland lost up to €45 million on building a major roadway after underestimating the cost of labour and materials and incurring financial penalties for delays. Carl O'Brien, Social Affairs Correspondent, reports.

Gama Construction was awarded a contract to build the 21km Ennis bypass in Co Clare four years ago, before it became embroiled in controversy over paying hundreds of Turkish builders in Ireland less than the minimum wage.

However, the company went on to lose significant amounts of money on the €200 million project due to factors including underestimating the cost of labour and financial penalties for delays in the project.

The final leg of the Ennis bypass was finally opened in December, eight months after it was due to be completed. As a result, the company was forced to pay an undisclosed sum to Clare County Council.

The extent of the losses has come to light in a ruling by the Labour Court on a claim by Siptu for workers for a "finishing bonus" of between one and two weeks' additional pay. The union said the project went over budget because Gama failed to take into account the true cost of its legislative obligations towards its workers. It said members should be entitled to a bonus as it was becoming the norm on large projects.

In its submission, the company said such a bonus was not part of the deal with its employees. It did not give reasons for its losses, but said they were projected to be as much as €45 million.The court rejected the union's claim.

The contract for constructing the bypass was €123 million, while additional sums were spent on acquiring land, planning, design and archaeological work.

While it has been involved in some of the biggest infrastructure projects in the State, Gama's Irish operation has made significant losses recently. A pre-tax profit of €10 million in 2006 included €55m from the sale of its share in a power plant. In the previous year it made a €44 million loss.

The Irish Times

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