Carillion projects amassed £5.7bn at the time of its crash

In the week before Carillion bosses head to parliament to be grilled by MPs over their role in the industry giant’s demise, new research has shown the firm was the main contractor on 57 construction projects worth a total of £5.7bn on the day it liquidated.

The information comes from construction industry analysts Barbour ABI who have accounted for major projects such as Royal Liverpool Hospital and an army basing programme in Salisbury worth £450m and £340m respectively. The two schemes which remain in limbo are two of ten projects which are worth more than £150m. The figures also account for the £1.3bn HS2 contract.

Analysts say Carillion were also involved in 16 framework contracts as part of a list of companies pre-selected or pre-qualified to undertake works for an organisation. These framework contracts are not included as part of the final 57 projects as there is no guarantee that they had won any work from the framework.

Commenting on these findings, Michael Dall, lead economist at Barbour ABI, said: “Carillion were deeply embedded within the construction industry - they were the second biggest contractor in the UK by revenue. Our records show that they were the main contractor on almost 60 schemes worth a total value of £5.7bn.  That is not to mention the plethora of other contracts where they were carrying out other construction roles.” 

Today also marks the start of a two-part inquiry into Carillion’s collapse after a joint inquiry was launched by the business and the work and pensions select committees. MPs are keen to find answers about what role senior executives at the collapsed construction giant played in the firm’s downfall. The committees will hear from Robin Ellison, chairman of trustees of Carillion's pension scheme and next week, Carillion’s former chief executive Richard Howson and chairman Phillip Green will be summoned, along with a host of finance directors. 

MPs have been highly critical of the company and its senior employees since news broke that the company liquidated with a reported £5bn of liabilities and just £29m left in cash. The business committee chair, Rachel Reeves, lambasted directors last week by saying Carillion “has the hallmarks of another corporate governance failure” and those directors at the top “fell asleep at the wheel while the business went off a cliff”.

There are now concerns about the futures of many smaller and medium-sized firms within Carillion’s supply chain. “The sector where Carillion had the largest presence was infrastructure - road and rail projects were a particular speciality for the firm,” Dall added. “In addition, Carillion were in the process of delivering two new hospitals and were also responsible for various school improvement projects. What happens to these projects is a matter for conjecture. If the reason Carillion went bust was due to under-bidding then it stands to reason that the financial terms will have to be renegotiated. There is no doubt this will happen but will it happen quickly enough to save the many firms in the Carillion supply chain?” 

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