Work on the construction of a £7.7m building at Magee campus of the University of Ulster in Derryhas been halted because the contractor has gone into administration.
T&A Kernoghan Ltd won the contract last year to build a new teaching block.
The foundations and steel work on the building have been completed (pictured).
However, the project was dealt a major blow this week following the news that T&A Kernoghan Ltd had gone into administration.
When a company is put into administration, it means that it does not have sufficient funds to continue trading.
If the company cannot be saved then it usually goes into liquidation which means that everything is sold off to pay its debts.
A spokesman for T&A Kernoghan, which is based at Mallusk in Country Antrim and employs around 50 people, confirmed administrators had been appointed to the family business.
The difficulties faced by the company will have a huge impact on other companies involved in the construction of the teaching block at Magee.
It is understood a number of local companies have not been paid for the work they have already carried on the teaching block on a sub-contract basis from T&A Kernoghan’s.
These companies now face the prospect of losing huge amounts of money.
A source within the construction industry revealed some of the smaller companies involved could themselves struggle to survive following this latest blow.
“This could have a serious knock-on effect on other companies, especially the smaller ones,” he said.
“There is a lot of money owed already on this project and it now looks like the companies involved will struggle to get their money.”
Work on the teaching block started last September and had been due to be finished by March next year.
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The project involves the construction of a new four-storey teaching block adjoining the existing library at the Magee campus.
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