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Carillion: £1bn-worth of projects stopped in wake of collapse

Work on more than £1bn-worth of projects has been halted following the liquidation of Carillion on Monday.

Construction News has collected information on nearly 20 high-profile projects that have been halted as the fallout from the collapse of the UK’s second biggest contractor continues.

Workers had still not returned to the Midland Metropolitan Hospital (pictured) on Tuesday, despite staff on Carillion’s other PPP problem hospital job – the Royal Liverpool Hospital – returning to work after being sent home on Monday.

A number of commercial developments on which Carillion was main contractor have been halted until the developers behind the schemes decide how to take the projects forward.

Work stopped on the £154m Angel Gardens scheme in Manchester with developers, Moda Living and Apache Capital, searching for a replacement contractor as soon as possible to ensure work restarts.

The £100m redevelopment of the former Vaux brewery in Sunderland has not seen workers for the past two days following the news of its collapse.

Other projects on which work has been stopped include a £75m student accommodation project Manchester University’s Fallowfield, and the £60m One Chamberlain Square scheme in Birmingham.

Latest on Carillion

Carillion’s demise has also affected local councils, with Lincolnshire County Council now having to find a replacement contractor for its £97m bypass.

The council’s director of highways Richard Willis said Carillion had completed 10 per cent of the works and that the retendering of the contract would delay the project.

Leeds City Council also has to look elsewhere for a new contractor to build its £115m East Leeds Orbital Road.

The council chose Carillion at the start of this month for the scheme but said it would now have to review and restart the tendering process.

While work has stopped on a number of sites, other clients moved to reassure the markets that Carillion’s collapse would not be impacting their projects.

Work continues on the £800m Airport City project in Manchester, which is backed by investment from Manchester Airport Group and Beijing Construction Engineering Group.

Airport City director Lynda Shillaw said: “Current construction of the Airport City development is being undertaken by Beijing Construction Engineering Group International and is not affected by the issues at Carillion.”

The Royal Liverpool Trust confirmed that workers had returned to site and the project was now in the process of engaging a new contractor to complete the works.

Royal Liverpool and Broadgreen University Hospitals chief executive Aidan Kehoe said: “The hospital company who are contracted to deliver the project is empowered to terminate existing contracts and engage a new contractor to complete construction.

“They also have access to insurance funds to enable it to complete the project.”

Yesterday the government confirmed it provide funding to ensure public contracts were completed but would not bail out any private creditors.

Carillion’s biggest client, Network Rail, said work would continue on the failed contractor’s projects on an ongoing basis for the foreseeable future.

These projects include electrification work on the Midland Main Line, the North-west hub and the Shotts line between Edinburgh and Glasgow.

A Network Rail spokeswoman said: “Carillion’s work for Network Rail continues for the time being as Network Rail works with the official receiver and special manager to ensure the continuity of its project work.” 

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