Carillion's collapse threatens HS2 and other major transport infrastructure projects across the UK

Company is one of around six main contractors for Network Rail, which owns and operates Britain's railway infrastructure

Neil Lancefield
Monday 15 January 2018 14:08
What is the Carillion fiasco? Economics Editor Ben Chu explains

Carillion was handed a series of contracts to carry out major transport infrastructure projects before its collapse.

The construction giant is in a partnership which won two HS2 deals worth £1.34bn.

It was commissioned to design and build a 50-mile section of the high speed railway roughly between Aylesbury and Royal Leamington Spa.

:: Follow the latest updates and reaction to the collapse of Carillion ::

The contracts were awarded in July 2017, when Carillion was already in financial difficulty.

Carillion and the two other firms in the joint venture - Eiffage and Kier - were forced to give assurances that they could step in to deliver on the work if one of the partners collapsed.

A HS2 spokesman described Carillon going into liquidation as “clearly disappointing for them and the wider UK construction industry”.

He went on: “We are continuing to discuss with Kier and Eiffage the implementation of contingency plans.

“Work will continue as planned with no unnecessary or additional exposure to the taxpayer.”

The firms are still in the design phase of the deal, with detailed proposals due to be submitted by the end of the year.

Phase one of the £55.7bn railway will run between London and Birmingham from December 2026, with a second Y-shaped phase extending to the North.

Carillion are one of around six main contractors for Network Rail, which owns and operates Britain's railway infrastructure.

It is mostly involved in bridge replacements and track renewal, with contracts worth in total around £150m to £200m.

A Network Rail spokeswoman said: “Network Rail is activating its contingency plans as a result of this unfortunate news.

“Passengers can be reassured that their services will be running as normal today as Carillion's work for Network Rail does not involve the day-to-day running of the railway.”

Network Rail pledged to work with the administrators and Carillion's management to ensure the firm's collapse “has as little impact as possible on our projects”.

In November 2014 Carillion was one of five companies handed deals to carry out “high value construction work” for Highways England's £5bn five-year investment in England's motorways and major A roads.

It holds a major role in the smart motorway project, through which the hard shoulder is converted to a live traffic lane.

Carillion's website also states that it is “delivering transformative pieces of infrastructure” on the road network in Scotland and Wales.


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