07 November 2008
By Paul Gosling
The Northern Ireland Executive has suspended the sale and leaseback of 65 government offices.
Finance Minister Nigel Dodds has announced that the Private Finance Initiative project will not now go ahead until next year at the earliest. The sell-off was part of the Workplace 2010 programme, aimed at reforming government working environments.
A statement by the Department of Finance and Personnel claimed that the decision was taken because the two short-listed bidders – Land Securities Trillium and Telereal – were reported to be in merger negotiations. If the two companies merge there will cease to be a competitive process in the run-up to the contract award.
However, Dodds said the collapse in property prices was also a major factor, which meant that departments would be unable to realise the projected £175m capital receipts. The project's suspension 'will allow time to assess the impact of recent changes in the financial and property markets on the proposed procurement', Dodds said, but he admitted that this created a shortfall in capital spending plans.
Mitchel McLaughlin, a Sinn Féin member of the NI Assembly and chair of its finance and personnel committee, told Public Finance that he welcomed the programme's suspension. He said: 'The projected capital receipts are completely unachievable with the decline in property values.'
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