Aberdeen schools project in turmoil

Firm seeks urgent loan to continue work

By Neil Evanspolitical reporter

Published:

WARNING: Aberdeen City Council have been told work could grind to a halt without funding.

THE firm behind Aberdeen’s £120 million schools revamp was today desperately trying to find cash to stop the project grinding to a halt.

The global credit crunch has left the consortium building 10 new schools trying to find new financial backers.

Unless new cash is found contractors working on the ambitious 3Rs project may have to stop building work next week.

NYOP, the private consortium building the schools for Aberdeen City Council, needs a temporary “bridging loan” until if finds new backers after the collapse of Icelandic bank Landsbanki, which was funding the 3Rs project.

An urgent business committee will meet on Tuesday to discuss the next step for the council.

But it was understood members of Aberdeen City Council were told work on the 3Rs could stop temporarily while money was found to keep the project going.

NYOP’s loan from Iceland’s Landsbanki has been transferred to New Landsbanki, which was set up by the Icelandic government. But because of restrictions by the Icelandic government it cannot access all the money to make essential payments.

It is understood councillors were told NYOP’s funds will run dry next week and work by Pihl, the building firm which is part of the consortium, would have to stop temporarily.

A confidential report seen by the Evening Express has set out a number of options for the council.

It can act as a guarantor for the bridging loan until new funders are found, or provide the loan itself.

Aberdeen City Council could also cancel the contract and go out to tender to find another company to complete the work.

It could also take over the running of the project itself or buy the loan from New Landsbanki to finance the project.

Council leader Kate Dean said she would not comment on the latest stage of the project because it was “commercially sensitive and confidential”.

The 3Rs schools project will see a new school at Heathryburn open next year, followed by schools at Airyhall, Braehead and Mile End, Hazlehead, Cults, Bucksburn, Seaton, Manor Park and Kaimhill.

nevans@ajl.co.uk