The States of Guernsey has backed out of a contract with R.G. Falla to build the island's new higher education campus at Les Ozouets.
The local company was awarded the multi-million-pound contract to build the new facility in June, but the government now says it "made the difficult decision to withdraw from the relationship" after R.G. Falla "sought to unilaterally alter" terms of their agreement.
In a statement, the States says proceeding to use R.G. Falla for the build would have "represented an untenable level of risk" for a project funded by taxpayers.
Andrea Dudley-Owen leads the Education, Sport and Culture committee. She says: "The States has been forced into taking this decisive action to ensure we fully uphold our responsibilities to taxpayers around safeguarding the public purse.
"To say this is very disappointing is an understatement, but we felt we had no choice following recent discussions with R.G. Falla. The changes it was trying to introduce meant the new terms failed our due diligence processes, which are designed to mitigate the risk to public money when entering large-scale financial commitments such as this build."
Deputy Dudley-Owen added: "The Committee is not disheartened because we know that this model remains the right fit for Guernsey and builds a firm foundation for the island’s future success.
"Any attempt by political opponents of our model to seize on this as an opportunity for point-scoring would be hugely detrimental to our young people, adult learners and our workforce after all the uncertainty and turbulence of recent years."
Building work was supposed to begin on the site 'imminently', but the States says there was a "unanimous" agreement that proceeding to use R.G. Falla was too risky.
The Education, Sport and Culture Committee and the States Procurement Team is now reviewing other alternative contractors to work on the build.
Education Director, Nick Hynes, says: "We are confident of being able to adjust plans to ensure we maintain many elements of the reorganisation of secondary and post-16 education within the existing timeline.
"It is likely there will be a delay to the build of the post-16 campus so students and staff who hoped to be on that site in 2025 will likely be affected, but all other changes as we reorganise into three 11-16 schools will continue to progress as planned."
ITV News has contacted R.G. Falla for a response.
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