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Railtrack urged to pay consultants directly after Christiani failure

RAILTRACK THIS week came under pressure to make direct payments to consultants employed by failed contractor Christiani & Nielsen.

Pressure mounted on the track operator after the Association of Consulting Engineers raised concerns that its members would lose out if they were not retained after contracts are novated.

Christiani & Nielsen went into administration two weeks ago after failing to overcome a crippling cashflow crisis (NCE last week). This week administrator KPMG was no closer to finding a buyer for the business after Kier expressed interest and then withdrew after assessing ongoing contracts.

Kier's loss of interest increased fears among sub consultants that C&N clients like Railtrack would not pay them directly.

KPMG said that it wants to novate contracts to third parties but they were unlikely to have any legal obligation to pay sub consultants.

The Association of Consulting Engineers this week urged Railtrack to honour its 'moral obligation' and pay the sub consultants directly.

'We are particularly concerned over monies outstanding to ACE members appointed as sub consultants to C&N and will be asking clients such as Railtrack to give serious consideration to their moral obligations to meet the costs of, for example, design checks, the scope of which includes safety and proper functioning of completed projects, ' ACE legal director Clare Bristow said.

'We've written to them pointing out various options. We know that Railtrack retained money that was due to C&N on some projects. They could make a direct payment, ' she added.

If consultants are not paid, Bristow said they could claim intellectual property rights over designs and stop them from being used.

Railtrack responded that it would negotiate with sub consultants on a case by case basis because projects concerned were at different stages.

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