Gary McDonald: What can be done for Ulster University's stalled Belfast campus?

With no immediate sign of workers returning to site, Business Editor Gary McDonald asks what the future holds for Ulster University's troubled new Belfast campus

Work at the Ulster University's new Belfast city centre campus has stopped. Picture by Mal McCann
Work at the Ulster University's new Belfast city centre campus has stopped. Picture by Mal McCann

WHEN does a delayed project become a white elephant? And at what stage does that white elephant then become a blot on the landscape?

We're close, but not quite there yet, with Ulster University's much-heralded campus development in Belfast's York Street.

And unless a solution to the 'what next?' conundrum is unearthed soon, we could be looking at a concrete carbuncle which will take years to lance.

Work right now is stalled on the £250 million project that was originally meant to relocate most of the Jordanstown campus to Belfast city centre by autumn this year, creating 5,000 jobs in the process and bringing 15,000 students into town.

Tools were downed more than a month ago when the Lagan Construction Group, joint-venture partner on the scheme with Somague from Portugal, put four of its 30 subsidiaries into administration, impacting 200 (most were working on the university scheme) of the group's 800 staff.

This was the straw that seemed to break the camel's back on a project already blighted by disputes, threats of injunctions, various legal wrangling over contracts and even an archaeological dig, and which had already pushed any opening back to 2021 at the earliest.

Now being separately worked through by administrators from KPMG and lawyers for the university and JV partners, these are weighty issues for another day.

But what about the here-and-now? How can this project possibly be taken forward to completion in any reasonable time scale?

In short, it can't - unless a shed-load of extra cash can be magicked up from somewhere (£30 million is one figure I hear bandied about).

There's a consensus within the north's wider construction sector that this contract will be very difficult to complete at the price it was awarded at.

Alarm bells around a funding gap sounded pretty early on and it was clear extra money was needed to complete on time.

This project, remember, was funded by a £150 million loan from the European Investment Bank (I wonder are they regretting dipping their toe into Northern Ireland for the first time?), the public purse and the university's own reserves.

When the red flag was eventually raised last year, in normal circumstances the client might have turned to central government for a bail-out. We know, of course, that Stormont's gates remain locked and no new cash was forthcoming.

So with Lagan gone from March, could Somague go it alone? Absolutely not. Their prime role had been to ensure there was a sufficient supply of labour, and industry insiders claim they have neither the technical capability to complete the job on their own nor the appetite to seek out another joint venture partner.

Could a knight in shining armour be prepared to come in to pick up the pieces? No. You could almost hear the cries of "not at that bloody price" in the boardrooms of Graham, Farrans, McAleer & Rushe or McLaughlin & Harvey (some, with others, had been involved in the original bidding process so knew the territory).

So what's left? Well, given the general lack of direction from (and media silence) the various players in this whole comedy of errors, one option might be for a contractor in Britain to be persuaded to take a punt on the project, dangerous and costly though this might be.

There would have to be incentives given and safeguards written in, and those sub-contractors still tied in to this seemingly now failed JV partnership supply chain would need guarantees from somewhere.

For now the workers have gone, sales of energy drinks and bacon baps in nearby shops have plummeted, much of the smaller plant and machinery has been removed, and the site has fallen eerily silent.

But if the cranes go, and the scaffolding comes away to lay bare the shell of this promised world-class learning facility, then Belfast really will have a blot on its landscape.