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Lagan Construction: £250m uni job to restart after subbie pay deal

The £250m revamp of Ulster University that was halted following the collapse of Lagan Construction will restart after a deal was agreed between the university and the contractor’s administrator.

Ulster University confirmed work would restart on the project “as soon as possible”, after administrator KPMG struck a deal with the university and its Portuguese contractor Somague that would allow the site’s subcontractors to be paid.

A joint statement from the university and Somague said: “After a period of detailed discussions, Ulster University and Somague can confirm that an agreement has now been reached with the administrator of Lagan Construction, which enables payments to be made to subcontractors.

“Somague has confirmed plans are under way to resume building works on site as soon as possible.”

Work stopped on the £250m Ulster University scheme after it was announced that Lagan Construction would be put into administration in late February

The Belfast Telegraph reported in March that a number of subcontractors were still owed money on the scheme.

Over the last three months the university has been locked in talks with Somague to get work restarted, but admitted in March that Lagan Construction’s collapse would lead to “unavoidable delays”.

News of the deal comes just two weeks after KPMG revealed Lagan Construction owed firms more than £21m when it collapsed.

The company’s trade creditors were owed £9.1m, while a further £12.5m was owed to the company’s joint ventures.

A JV between Lagan and Somague signed a £150m contract to complete the second phase of Ulster University’s York Street campus redevelopment as part of the £250m redevelopment – the biggest construction project in Northern Ireland at the time. 

The scheme has been beset with delays due to issues with delivery.

Despite the agreement being struck with the administrator, the university was unable to confirm when it expected work to be completed.

It was reported in January that the JV had told the university the scheme would not be completed until 2022.

The university refuted this, standing by its stated 2019 completion date.

KPMG has been contacted for comment.

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