Business / SSEN determined to ‘do the right thing’ after key contractor goes out of business
SSEN Transmission and principal contractor Morgan Sindall have said no local company will be left out of pocket after a key contractor building the Gremista to Kergord cable link went out of business.
More than a dozen local companies could potentially lose significant amounts of money after Livingston-based Glenevin Ltd was placed into administration on 6 September, with the loss of 45 jobs.
The company was Morgan Sindall’s main contractor for the underground cabling project and had a temporary local base at Lerwick’s Greenhead Base.
It has been confirmed by the administrators that Glenevin’s role in the Shetland project was not instrumental in the company’s demise, despite some problems locally.
Joint administrators Gareth Harris and Paul Dounis of RSM UK Restructuring Advisory said the company became unviable after funding for some full fibre broadband construction contracts was withdrawn.
A spokesperson for administrator said: “We understand from the companies records that there are 14 companies [in the ZE postcode area] that were owed monies by Glenevin at the date of appointment of the joint administrators.
“It is very early stages in the administration, and we are still assessing the potential asset recoveries, but initial estimates suggest a recovery for unsecured creditors is unlikely.”
Shetland News spoke to several local companies who all confirmed that they are set to lose at least five-figure sums, which for some of the smaller businesses could lead to financial difficulties.
However, in a joint statement by SSE Transmission and Morgan Sindall Infrastructure, a spokesperson told Shetland News: “We are committed to do everything we can to ensure any local impacts are fully mitigated and local businesses are not left out of pocket.”
It is understood that discussions to explore how this can be achieved while the company that owes these monies goes through the administration process have already started.
Morgan Sindall appointed Glenevin as its main contractor for the cabling project in summer last year, with local companies acting as sub-contractors and suppliers.
Following May’s well-documented peat slide at Kergord, a dispute between the parties broke out over who was to foot the bill for the additional cost due to the site being stood down for several weeks for safety reasons.
At the time there was talk of sub-contractors involved in the works downing tools in protest. However, SSEN Transmission insisted that work on the project stopped for no longer than two weeks, and this was mainly due to Glenevin going out of business.
The utility also confirmed that some of the local sub-contractors, such as CW Johnson Plant, were now directly employed by Morgan Sindall, while Ness Engineering has been appointed to carry on some of the aspects of the former Glenevin contract.
The SSEN Transmission spokesperson said: “Alongside our principal contractor, Morgan Sindall Infrastructure, we continue to support Shetland-based businesses affected by Glenevin’s current circumstance, including successfully re-engaging a number of the businesses on the project.”
The company added the project connecting the local electricity network to the Viking wind farm and national grid continues to be on schedule.
“We remain committed to supporting the local supply chain in Shetland and maximising the local opportunities our infrastructure developments present, key for the successful delivery of the Kergord to Gremista connection project, which remains on track for completion by the end of 2025, and any future network developments in Shetland,” the spokesperson said.
