£2bn Northern Ireland government buildings upgrades postponed

A £2bn PFI plan to upgrade Northern Ireland's government buildings has been postponed at the 11th hour amid concerns about a possible merger of the two shortlisted bidders and spiralling property values.

Land Securities Trillium and Telereal submitted their final offers in June. Under the deal, known as Workplace 2010, the winning bidder would pay around £200m to take over 65 government buildings, including parts of the Stormont estate in Belfast.

The private sector partner would then fund a major refurbishment programme and maintain the properties over the 20-year contract.

But rumours that Telereal could buy Land Securities Trillium from Land Securities Group have prompted the Department of Finance and Personnel (DFP) to postpone the procurement process until early next year.

A DFP spokesman said: "This decision has been taken as a result of continuing speculation that both bidders could come under common ownership, which has the potential to affect the Workplace 2010 procurement.

"The suspension will also give the department time to assess the impact of recent changes in the financial and property markets."

A source close to the deal said: "It has been a difficult procurement and now with the debt market as it is, and falling property values, it is not a bad time for both sides to take stock. There are bound to be affordability issues on both sides."