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Subbies facing chaos in wake of Carillion demise

Subcontractors have told Construction News of the confusion and chaos on Carillion projects following the firm’s collapse.

One subcontractor alleged to CN that Carillion representatives were trying to block subcontractors getting on sites to remove equipment after it was announced this morning that the firm was to enter liquidation.

The North-east subcontractor, which asked not to be identified, eventually got their equipment off site, but said there was significant confusion at the scene.

“Carillion lads on site don’t know what’s happening. None of us know what’s happening,” he said.

Work on other Carillion projects, however, appears to be ongoing.

McMullen Facades is working for Carillion on the Google building in King’s Cross and the company’s commercial director Colin Lewis told CN the site was “still operational”.

He said: “At the moment we’ve told our guys to carry on and keep on working as business as normal.”

Mr Lewis added: “I’ve been informed by the directors on that job that they’ll have more information later today and they’ll let us know.”

Companies that were not working with Carillion directly have also reported immediate impacts from its collapse today.

A specialist contractor with no exposure to Carillion said: “We’ve been contacted by people at a developer we’re working for, asking if we had any exposure to them.

“They’re looking at their supply chain and seeing who’s going to be hit, because it could potentially damage performance on their projects.”

The future of Carillion’s 20,000 UK employees hangs in the balance today, with subcontractors also highlighting the wider impact of its liquidation.

The North-east subcontractor said: “We’ve pulled 12 guys off site today and they were working four or five to one [Carillion employee].

“So never mind 20,000; there could be 100,000-140,000 indirectly employed [on Carillion projects who are affected].”

He said his company stood to lose around £100,000 from Carillion’s failure, and that while it would be a “black eye” for his business, it would survive and did not expect to have to make any job cuts.

However, Mr Lewis said: “There could be quite a few out there that are owed quite a bit of money, so the potential fallout could be catastrophic for the construction industry.”

The Federation of Master Builders said there was a substantial risk to huge numbers of SMEs.

FMB chief executive Brian Berry said: “Carillion’s liquidation is terrible news for all those who work for the company and it will have serious knock-on effects for the many smaller firms in its supply chain, some of which will be in financial danger as a result of Carillion’s demise.”

Several subcontractor have expressed anger over the government’s perceived lack of action to prevent the collapse.

Mr Lewis said: “I think the government has been extremely short-sighted in not stepping in sooner with such a large company, particularly with the government contracts.”

However, on the question of possible intervention, the North-east contractor said the government was “damned if they do and damned if the don’t”.

But he added that the overall cost of the collapse had not been fully appreciated.

“They haven’t thought it through,” he said. “No one knows where the losses will stop.”

Have you been affected by Carillion’s liquidation? We want to hear from you:

Readers' comments (2)

  • The first email i received this morning was from my relationship manager at the bank. Probably worried about the extent of our exposure to Carillion which thankfully is nil

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  • How did the Government let this state of affairs go on? Why are they doling out works after the profit warnings - Who the hell is pricing these works in the first place if they can lose that amount of money. We all know many of these "big boys" use their subbies money to keep afloat by late or unfair payment terms and by keeping retentions that do not belong to them. Who is going to pay the thousands of decent, hardworking suppliers and small subcontractors who make up their workforce while they sit on site with their clipboards trying to find ways to squeeze every penny they can out of them for their own ends.
    Some of these companies are a disgrace and the lads who do the work and have made them their money are seen as disposable and treated like dirt. This has to change and quickly. The work should be spread around fairly amongst the hundreds of other main contractors who may do a much better job than these huge management companies.

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