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Amey paid £2.1m for Carillion rail contracts

Amey paid the official receiver a total of £2.1m for Carillion’s Network Rail contracts, Construction News can reveal.

The price tag for the deal, which saw Amey Rail take on the majority of Carillion’s rail contracts in February, was confirmed in its latest accounts.

Among the contracts Amey took on were Carillion’s remaining North-west electrification packages, the Midland Main Line civils and upgrade deal, and Network Rail’s contract for the West Old Oak Common and Paddington approaches to support Crossrail.

The Insolvency Service told CN the £2.1m raised by the sale would towards the liquidation costs and be used to pay back Carillion’s creditors.

CN revealed in April that Carillion collapsed owing nearly £7bn. It is estimated that nearly £2bn of this figure was owed to trade creditors.

The contracts provided a significant boost to Amey Rail’s revenue and propelled the firm towards the top of Network Rail’s annual contractor spend table, moving from sixth to third place.

For the year to October 2018, the contractor secured work totalling £294.2m, up from £207.5m in the previous 12 months.

Carillion was Network Rail’s 15th biggest supplier for the period, having picked up £85.6m-worth of work in the months leading up to its liquidation.

In February, CN revealed that Carillion special manager PwC was putting Carillion’s rail contracts up for sale. Amey scooped the deals two weeks later, safeguarding around 700 jobs.

An Insolvency Service spokesman told Construction News that the official receiver, through PwC, arranged the sale of the contract in agreement with Network Rail.

He said bids were assessed on ability to ensure continuity of services and protect jobs, as well as the potential revenue generated for creditors.

Speaking to CN at the time of the sale, commercial and development director Matthew Steele said the agreement represented the best deal for the sector and would ensure the continuity of projects and protection of jobs.

A spokesman for Amey said its acquisition of the Carillion deals brought “much-needed stability to employees, suppliers and project”.

He added: “By working closely with the official receiver, we ensured the continuity of major projects such as the North-west Electrification Programme, East Coast Main Line, Midland Main Line and Crossrail. 

“We are proud of the role we’ve played in safeguarding our industry and we look forward to supporting Network Rail deliver on its CP6 commitments.”

The Carillion contracts Amey did not acquire include the deal to revamp Edinburgh’s Waverly station, and the IE Gauging deal covering work on lines in Scotland.

Both these programmes were transferred to Network Rail after the contractor’s collapse, and have now been handed to Story Contracting.

Carillion also held a 50 per cent stake in Carillion Powerlines, an electrification joint venture with SPL Powerlines.

In April SPL Powerlines bought out Carillion’s 50 per cent stake in a deal that saw it pre-pay £1.46m for the shares.

Carillion Powerlines carried out a total of £110.9m of work for Network Rail in the 12 months to October 2018, which represented work before and after the takeover.

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