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Company hired by Tories to build schools in financial trouble

Nov 25, 2008 12:30 PM
 

CALGARY – The Company hired by the Conservative government to build and operate eighteen schools has had its shares suspended and assets frozen.

According to the Financial Times, the Australian investment group Babcock & Brown has run into problems with bankers after running up debt of over three billion dollars (Australian).  The company has had its shares suspended and some of its assets frozen by bankers.

CUPE Alberta President D’Arcy Lanovaz said the looming insolvency raises questions about the operation of eighteen Alberta schools.

“From the start, we warned the government to build and operate schools using the tried and true public model,” said Lanovaz.  “Instead they chose a risky high cost model and now we don’t know if the schools will be delayed, who will operate the schools, and what they will do with the properties.”

In September, CUPE warned the government about Babcock & Brown’s high debt load, but the government insisted the school contracts should proceed because they are with a subsidiary company.

“If the parent company is going broke, it’s going to effect all aspects of the organization,” said Lanovaz.  “Now parents and students who have waited too long for new buildings will likely wait even longer.”