A contractor has taken legal action over its failed bid to secure a £130 million (€150 million) deal to refurbish Northern Ireland’s water systems.

Lagan Construction Group is suing NI Water, claiming unlawfulness in the procurement process for the four-year contract. The firm alleges its bid was wrongly rejected while abnormally low tenders from rivals were accepted. Further details cannot be disclosed to due issues of commercial confidentiality.

The case centres on the Watermains Rehabilitation Framework – a major investment programme for upgrading water quality and supply across Northern Ireland. Lagan Construction issued legal proceedings after its tender was unsuccessful.

During a four-day hearing at the High Court in Belfast, the company’s legal team set out reasons for claiming the process was unlawful. An order has been issued to prevent any disclosure of commercially sensitive material examined in the case. But responding to the claim today, counsel for NI Water argued that unless a tender is tainted by illegality there is no duty to reject it for being abnormally low.

‘Conceptually unsound’

Nigel Giffin QC said an unsuccessful bidder has no right to complain about the way such a decision is taken. “The plaintiff here is trying to break new ground in a way which is conceptually unsound and contrary to recent decided authority,” the barrister said. He also contended there could not be any complaint about final decisions lawfully open to NI Water.

"The fact is that there were indisputably coherent reasons for saying that the risk to Northern Ireland Water from accepting abnormally low tenders was mitigated and limited in particular by the nature of the framework in question," Mr Giffin added. Following submissions Mr Justice Burgess reserved judgment in the action.