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'How was a company millions in debt given social housing contracts?' - Families and subcontractors demand answers

  • Recent accounts show company was loss-making
  • Families on waiting list for years fear 'we'll never get our homes'
  • Subcontractors refuse to continue building as they haven't been paid
  • In 2016, MDY had debts of more than €5m

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Wheelchair user Kenny Delahunt (inset) has been on the housing waiting list for three years. Builders stopped working on the site at Dunmurray as they hadn't received payment

Wheelchair user Kenny Delahunt (inset) has been on the housing waiting list for three years. Builders stopped working on the site at Dunmurray as they hadn't received payment

Wheelchair user Kenny Delahunt (inset) has been on the housing waiting list for three years. Builders stopped working on the site at Dunmurray as they hadn't received payment

Subcontractors owed thousands of euro from a construction company have slammed how a business €5 million in debt was given contracts to develop 190 new social housing units.

MDY Construction, which has now been placed in examinership, was involved in building state-funded social and affordable housing projects in Dublin, Kildare and Wicklow.

Families who expected to move into their new homes early next year now fear homelessness as the completion of these projects is on hold due to the company's financial difficulties.

Dozens of subcontractors have claimed they are each owed between €140,000 and €500,000 for the work they have completed so far.

They have since stopped building and removed equipment from the various sites as they haven't been paid.

MDY's most recent accounts, for 2016, show the company was loss-making and had debts of more than €5m – considerably higher than its annual turnover at that point.

In the filing, the directors said they expected it to be profitable in 2017 but even so the accounts indicate that the company was in talks with its lender and relying on its bank to remain in business.

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Builders removed scaffolding from the site at Dunmurray Rise two weeks ago as they hadn't received payment

Builders removed scaffolding from the site at Dunmurray Rise two weeks ago as they hadn't received payment

Builders removed scaffolding from the site at Dunmurray Rise two weeks ago as they hadn't received payment

The company also recently changed auditors.

Those waiting for their new homes fear the sites will now turn into ghost estates, a prominent feature of Ireland after the crash.

Kenny Delahunt and his mother Mary have been on the housing waiting list for three years.

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Kenny Delahunt

Kenny Delahunt

Kenny Delahunt

 

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They were due to move into a three-bed house with a one-bed single storey family flat attached in Dunmurray Rise, Bishopsland, Co Kildare at the beginning of next year.

Kenny, who is a wheelchair user, said they are worried about the situation but hope it will soon be resolved.

"We were shocked when we heard through the media about what was going on. I just hope it will all be sorted soon as we were really excited about moving into our new house," he told Independent.ie.

JRS Scaffolding, which was subcontracted to build 32 homes at Dunmurray, removed all its scaffolding two weeks ago after learning of MDY's financial troubles.

Scaffolders working on a site at Cherry Orchard in Dublin have also ceased building.

Sinn Féin TD Aengus O'Snodaigh said residents were due to move into their new homes and are extremely disappointed by the whole saga.

MDY was contracted to build 72 units on the Cherry Orchard site; 36 are completed and 36 were due to be completed by November 2018.

"A woman I spoke to was in floods of tears because she is due to leave her rented accommodation on 3 October," Mr O'Snodaigh said.

"She had managed to get an extension from May on the basis that she would be in by July. That is what people were told originally. A significant number of the other tenants who will be moving in have children with autism and other disabilities and have been looking forward to homes with gardens.

"They have enrolled their children in local schools and, while they remain away from the vicinity, they have had to make travel arrangements for the past two months to Ballyfermot and Cherry Orchard."

The development of these houses is funded by the Government under the Rebuilding Ireland, Action Plan for Housing and Homelessness and it was anticipated that the units would be delivered early in 2019.

JRS Scaffolding, which is only in its first year of business, was subcontracted to build 32 houses at Dunmurray Rise as well as 56 social homes in Bray, Wicklow and four apartment blocks in Rialto, Dublin.

"Staff are afraid that their jobs are going to be gone but again we're going to try get new contracts and have them working on other sites. At the end of it, it's something we're going to have to get on with," Alan Sherlock, director of JRS told Independent.ie.

"It's disgraceful. It's absolutely disgraceful the way things have gone on [with Ireland's housing crisis]. It's not MDY's fault, it's something in the background, we don't know what it is. It's having a knock-on effect with every supplier, every subcontractor, everyone. MDY want to fulfil the contracts but for whatever reason they can't".

In an email sent to subcontractors two weeks ago, before it was placed into examinership, a managing director of MDY said: "I acknowledge that MDY has not been a pleasant place to work in recent times. Please note that contrary to rumours MDY Construction has not been placed in receivership or liquidation.

"We have decided to keep the head office and the sites open for the foreseeable future to see how this plays out.

"Please note that for the next two days there should be no materials delivered to the site and/or work completed by subcontractors on site."

Another subcontractor, who wishes to remain anonymous, said he raised concerns with MDY earlier this year.

"I was brought into a room and promised I would be paid, and stupidly I believed it so kept building. I now fear we're going to lose our house over the debts we've accumulated," he said.

"But the question all the subcontractors are asking is how MDY was given these contracts when they were €5m in debt?"

A spokesperson for the Department of Housing said the Department is aware of the situation.

When asked why MDY was given housing contracts considering its financial situation, the spokesperson said: "This is a matter for the local authorities, the AHBs concerned and the construction company.  Local authorities and AHBs are examining a solution to the matter.

"Specific legislation regarding public procurement, as well as the statutory arrangements in place to protect subcontractors, fall under the remit of the Department of Finance and Public Expenditure and Reform and the Department for Business, Enterprise and Innovation."

Kildare County Council signed a contract with MDY Construction on 9 March 2018 for delivery of 32 social housing units at Dunmurray Rise, Kildare Town.

A spokesperson said it "has no further comment to make at this time" when asked about MDY's viability.

Examinership

MDY has now sought the protection of the courts as it is currently insolvent and unable to pay its debts as they fall due.

The company estimates the cost to complete all these projects, which are due to be handed over at various dates ranging from next month to June 2019, to be €38m.

The court also heard that works on some of the projects, which in some cases is being done on behalf of various state entities, have ceased.

Ross Gorman BL, barrister for MDY's board of directors, told the High Court the company had a reasonable prospect of survival if certain steps are taken, including putting together a scheme of arrangement with the company's creditors.


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