Published On: Sat, Jan 20th, 2018

Carillion construction company collapse and what we know about the construction giant.

Carillion construction company collapse and what we know about the construction giant.

Construction giant Carillion has said it has “no choice but to take steps to enter into compulsory liquidation with immediate effect” after talks failed to find another way to deal with the company’s debts.

The stricken company, which employs 20,000 workers across Britain, said its crunch talks over the weekend aiming at shoring up its debt failed.

The news has left construction workers on railways, construction sites, prisons, hospitals and schools desperately seeking information on how their jobs and pensions will be kept safe.

In the UK some of its projects have included the Royal Opera House, the Channel Tunnel, Tate Modern, the Library of Birmingham and the famous doughnut building of the UK’s Government Communications Headquarters.

Chairman Philip Green said: “This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years.

“Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future and the board is very grateful for the huge efforts made by Keith Cochrane, our executive team and many others who have worked tirelessly over this period.

“In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.

“We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.”

The company is understood to have public sector or public/private partnership contracts worth £1.7 billion, including providing school dinners, cleaning and catering at NHS hospitals, construction work on rail projects such as HS2 and maintaining 50,000 army base homes for the Ministry of Defence.

As a result, the Government has been under increasing pressure to intervene to prevent the collapse of the company.

Rehana Azam, national officer of the GMB union, said: “The fact such a massive government contractor like Carillion has been allowed to go into administration shows the complete failure of a system that has put our public services in the grip of shady profit-making contractors.

“The priority now for the Government and administrators is making sure kids in schools still get fed to day – and our members still have jobs and pensions.

“There is no place for private companies who answer to shareholders, not patients, parents and service users in our public services.

“What’s happening with Carillion yet again shows the perils of allowing privatisation to run rampant in our schools, our hospitals and our prisons.”

A petition launched over the weekend calling for Carillion to be nationalised had attracted more than 1,200 signatures.

So what does Carillion do? Here is some background on the firm:

In 1999 the Tarmac Group demerged into a building materials company: Tarmac, and a service provider:Carillion.

After 1999 it went on to acquire further well-known companies including Mowlem in 2006, Alfred McAlpine in 2008, Vanbots in 2008, and Eaga in 2011.

The company employs around 43,000 globally – around 20,000 in Britain – and has its base in Wolverhampton.

The firm is understood to have public sector or public/private partnership contracts worth £1.7 billion, including providing school dinners, cleaning and catering at NHS hospitals, construction work on rail projects such as HS2 and maintaining 50,000 army base homes for the Ministry of Defence.

In the UK some of its projects have included the Royal Opera House, the Channel Tunnel, Tate Modern, the Library of Birmingham and the famous doughnut building of the UK’s Government Communications Headquarters (GCHQ).

Internationally it has been responsible for Oman’s parliament – the Majlis, Alvito Dam in Portugal and the Yas Marina Hotel in Abu Dhabi.

As recently as January 2, Carillion celebrated the completion of what it described as “another successful project” at Edinburgh Waverley Station.

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Carillion construction company collapse and what we know about the construction giant.