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Top 10 news stories of 2018: Carillion, Lagan and late payment

A look back at the most-read news stories in 2018, from Carillion’s collapse, to the CN100.



1) Four Lagan Construction firms in administration as 200 jobs threatened

In February, Lagan Construction Group announced four of its biggest companies had been placed into administration.

With the news coming a little over a month after Carillion was liquidated, there were huge fears of a contagion spreading across the industry.

Lagan Construction Group chairman Michael Lagan said the collapse of the four firms was due to protracted contractual disputes, as well as instability caused by one of its UK joint ventures.

CN Awards 2018 Training Network Rail

CN Awards 2018 Training Network Rail

2) Network Rail’s contractor league table revealed

The latest league table of Network Rail’s busiest suppliers, published in October, revealed Costain had been displaced by Siemens Rail Automation.

The rail client spent £434.8m with the German firm in the 12 months to October 2018, while Costain came in second having secured £343.5m worth of work.

Amey Rail, which bought all but two of Carillion’s rail contracts in February, was the biggest riser in the table, landing £294.2m of work in the 12 months to October 2018, up from £207.5m for the previous 12.


carillion head office logo 2

carillion head office logo 2

3) Carillion collapses into liquidation as talks fail

Carillion’s fall into liquidation was the story that shook the construction industry and has informed almost every conversation regarding the health of the sector since.

The firm had managed to rack up a debt pile of £1.5bn and had a series of problem projects that were haemorrhaging money.

Lenders finally lost faith in the ability of the firm’s leadership to steer the contractor through its troubles, electing to cut their losses and let the firm collapse.

More on Carillion and fallout from its collapse.


Aberdeen Western Peripheral Route beam installation

Aberdeen Western Peripheral Route beam installation

4) Carillion leaves Balfour and Galliford with £80m bill on road job

The £745m Aberdeen Western Peripheral Route was one of Carillion’s biggest problem projects.

The collapse of the contractor meant its JV partners on the scheme – Balfour Beatty and Galliford Try – were left with a bill of £80m to cover the cost of finishing the job.

A CN investigation in June revealed massive health and safety concerns on the project and in November, Galliford Try said it would lose a further £20m on the project due to delays.

The opening of the road has been pushed back to 2019, though no definitive date has been given.


Generic Financial money finance coins notes payment

Generic Financial money finance coins notes payment

5) Top 20 contractors’ payment waits revealed

In July, compulsory payment practice reports submitted to government revealed that, on average, the 20 biggest contractors by turnover take 47 days to pay invoices.

Engie Regeneration were the slowest payers in the top 20 at 61 days, but the firm paid 99 per cent of its invoices within the agreed terms, which was the best of any top-20 firm.

Willmott Dixon was the fastest payer among the set, taking an average of 33 days to pay invoices.


Canary Wharf Contractors_1 Bank Street

Canary Wharf Contractors_1 Bank Street

6) Man dies at Canary Wharf construction site after fall

In January an unidentified man was found dead in a deep trench after an apparent fall at Canary Wharf Group’s One Bank Street site.

The man was pronounced dead at the scene by emergency services – Canary Wharf Group confirmed the deceased was not a construction worker.

Canary Wharf Group’s 27-storey One Bank Street tower will include office space and art trading space.


Carillion logo van worker

Carillion logo van worker

7) Carillion ‘minder’ missing amid financial woes

On 8 January, in the days leading up the liquidation of Carillion, CN revealed the contractor had been left without a crown representative for at least two months in 2017.

This covered the period in which the firm revealed a half-year loss of £1.15bn and the sale of its healthcare arm.

Crown representatives are appointed to each of the government’s 29 biggest suppliers, of which Carillion was one – their role is to identify cost savings for the taxpayer and acting as a point of focus for supplier-related issues.


Galliford Try logo

Galliford Try logo

8) Galliford Try loses High Court case against subcontractor

Morrison Construction, Galliford Try’s Scottish construction arm, lost a High Court case in February against one of its subcontractors working on its gas processing plant off the coast of the Shetland Isles.

The dispute related to the valuation of a series of changes made during the job.

Morrison recruited BHC for structural steelwork, roof and wall cladding and concrete flooring, as well as all associated design work.




9) ’Catastrophic losses’: Carillion retentions crisis looms

A day after Carillion’s liquidation, various subcontractors revealed they were owed hundreds of thousands of pounds in retention monies by the firm, as the the impact of its demise began to emerge.

One subcontractor on a Carillion PFI project said it was owed £200,000, while another working on a housing maintenance deal claimed to have been left more than £150,000 out of pocket.

Specialist Engineering Contractors’ Group chief executive Rudi Klein estimated at the time that the amount of money held by Carillion in retentions could be as high as £1bn.


CN100 2018 news writeoff index

CN100 2018 news writeoff index

10) CN100: Top-10 margins fall again as debt climbs

The CN100 2018 revealed that the average pre-tax margin among the 10 biggest contractors by turnover had fallen for a fifth consecutive year to -0.9 per cent.

Total debt for the top 10 rocketed to £3.92bn according to their most recent accounts, up 24 per cent compared with their previous financial years.

Among those ranked between 11-100, pre-tax margins averaged 2.3 per cent, but this also down on last year’s average of 2.5 per cent.

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