It was announced in the early hours of this morning that Carillion, the UK’s second-largest construction firm and High Speed Two (HS2) contractor, has gone into liquidation.
The company holds the contracts for several public services, including the HS2 rail line and maintenance for Network Rail. Its 43,000 staff, 20,000 of which are in the UK, are now waiting to hear how they will be affected by the collapse.
Carillion is a member of consortiums, so some of its work may be taken up by other construction firms. According to BBC business editor Simon Jack, the government designed the HS2 agreement so Carillion’s partners could take on the work if the company ran into trouble, having awarded the contract to the firm despite uncertainty over its future.
According to Construction News, Carillion’s partner firms on the HS2 project have plans in place to continue works on the controversial high-speed rail line. Haydn Mursell, CEO of Kier, which works alongside Carillion said there are a number of options available.
However, Carillion was the sole contractor for Network Rail, so that work may have to be taken in house, according to the BBC. Network Rail said on its Twitter page that it would work closely with Carillion’s liquidators to “ensure projects that they are working on continue and that the supply chain is maintained for this important work”.
Carillion’s £1.5 billion of debt included a £587 million pension deficit, raising concerns for the firm’s 28,000 pension scheme members.