Jarvis, the cash-strapped infrastructure company, is close to losing another contract - a £40m deal to build a new school of music in Cork.
Officials at Ireland's Department of Education and Science (DES) have warned Jarvis that unless it comes up with a construction schedule by the end of the year it will be forced to consider offering the contract to another company.
The news comes after Jarvis was stripped earlier this month of a £92m contract to refurbish 37 schools in Norfolk.
Jarvis is the preferred bidder on the Cork Private Finance Initiative (PFI) project. However, it has yet to move to full financial close because it is in talks to sell its PFI investments to German construction company Hochtief.
David Gordon, the head of the Public-Private Partnerships unit at the DES, said: "In fairness to the people in Cork, we need a solution by the end of the year. If we don't get this then we will be forced to consider doing the project in an alternative way.
"This could be through traditional procurement or through a PPP with another company." The under bidder on the Cork project is construction company Bovis Lend Lease.
Hochtief is still considering whether to buy Jarvis's PFI portfolio, which also includes schemes in Manchester and Northern Ireland. The DES met Hochtief executives earlier this month and insisted that if it takes on the Cork contract then it must honour the original terms signed by Jarvis.
"Obviously, construction prices are rising, but I don't see why we should be penalised for that," said Mr Gordon.
Hochtief has until the end of this week to complete due diligence on the PFI projects before making a decision.
A Jarvis spokesman said: "The deal [with Cork] is on hold. We have not got to final close on the project as Hochtief are in the lead, they are the ones talking to the client."
Jarvis was originally in talks to sell its PFI schemes to Vinci. But the French construction company pulled out earlier this month after Jarvis was dropped for the Norfolk schools' refurbishment project.Reuse content