A Building investigation this week revealed that the suppliers are forming alliances and seeking legal advice on how they can claim redress from Nedam. Any case would hinge on the question of whether they were misled by a statement issued by Nedam on 11 September, which said the company intended to support its loss-making UK arm. On this basis, unpaid subcontractors decided not to stop work on Ballast projects, and one signed a further contract.
A month later, Nedam cut its financial support of Ballast, and on 15 October the subsidiary went into administration owing a total of £20m.
Deloitte & Touche, which is acting as administrator for Ballast, is holding a creditors' meeting at Heathrow in west London later this month, but has indicated that unsecured lenders are unlikely to be recompensed.
At least two subcontractors in the North-west – one of which is partitions specialist Sound Ceilings – are meeting with their lawyers this week to discuss taking action against Nedam. A source close to the firms said: "We are seeking legal advice this week to see if there is any just cause [in proceeding with legal action against Nedam]. We're all extremely angry about this."
A further group in the North-west, believed to include glazier Peter Rogers Associates and M&E contractor ABB, are looking at a similar move. A source close to this group said: "We're looking at it. The only other thing we can do is accept that it is part of the rough and tumble of the industry."
Up to six firms in the South, including M&E engineer RTT Group and civil engineer Marron, may follow suit. An insider said: "That is part of this group of companies' thinking, but nothing will be arranged until the end of the year."
M&E specialist NG Bailey is understood to be owed about £1m by Ballast. The firm declined to comment on whether it was considering action against Nedam.
A spokesperson for Nedam said the company was no longer responsible for Ballast's liabilities. "It all falls under the administrator and Ballast," she said.
Nedam may also come under scrutiny for bonds of guarantee it signed for a £88.5m Tower Hamlets schools PFI.
Costain has confirmed that it has pulled out of the running to take over any of Ballast's five remaining facilities management contracts. Everything else at Ballast has been either closed or sold.