NI Housing Executive 'cancels' Red Sky contracts
- 14 April 2011
- From the section Northern Ireland
The Housing Executive has terminated all its maintenance contracts with the Red Sky construction company, the BBC has learned.
The move follows an NIHE investigation into the company's work practices which included allegations of overcharging for jobs.
The east Belfast-based firm carried out maintenance work on most Housing Executive properties in the city.
It said it had "robustly rebutted in detail" the report.
The housing executive said the contracts would end in three months.
Following a 2010 BBC investigation into Red Sky's activities on some Housing Executive contracts, the housing body ordered a top-level inquiry into the contractor's work.
A further, wider investigation has now concluded and the executive said it could confirm that the inquiry has highlighted what it called "significant concerns about the company's performance, including overcharging", but it refused to give further details.
On Thursday, Red Sky said it was "absolutely clear that the allegations are without substance and are prepared to demonstrate this if necessary in a court of law".
It added: "Red Sky believes that NIHE did not properly consider the contents of Red Sky's reply in deciding on termination.
"Despite NIHE being presented with clear evidence last Thursday that Red Sky had not been overpaid, NIHE decided yesterday to unilaterally terminate all contracts.
"Red Sky is at a complete loss as to why NIHE has elected to act in this way and is seeking legal advice as to recourse for significant damage to its business."
The company said Red Sky Group and the jobs of its 400 employees in Belfast had been put at risk.
The contracts with the Housing Executive were worth several million pounds a year.
Red Sky was one of the main contractors used by the executive.
They had five contracts in four areas - south, east and west Belfast and Newtownabbey - to carry out repairs and provide fast response maintenance teams for a range of repairs.
The company has been working with the executive since 2004.
The BBC investigation discovered a number of executive tenants who were very unhappy about the level of service they received and the standard of repairs carried out to their homes.
One woman who was compensated after Red Sky did some work on her house, said her home was wrecked by the people who were supposed to repair it.
The investigation also uncovered evidence that Housing Executive staff repeatedly raised concerns about the company's standards of work, primarily in west Belfast.
The Housing Executive said it would be putting in place the necessary arrangements to provide response maintenance services to its tenants.
"Red Sky Group has five separate contracts covering Housing Executive districts in Belfast and Newtownabbey," the Housing Executive said
"We can confirm that the investigations have highlighted significant concerns about the contractor's performance including overcharging.
"It would not be appropriate to make public details of the nature and value of the findings at this
In 2010 Red Sky Group (Holdings) made a loss of £673,000. The year before it lost £1.97m.
A note in its last set of accounts, filed in February this year, says the company has been undergoing a restructuring and has closed loss making divisions.
It added that the current economic climate "poses significant challenges" though the firm continues to have the support of its bankers.