Quintain, the developer behind Wembley’s £2bn regeneration, decided against a £130m contract with Carillion in the summer due to fears over the contractor’s future “ability to trade”.
The client told Construction News it took a decision not to proceed with Carillion on the deal following the firm’s first profit warning in July.
The deal has now been awarded to McAleer & Rushe, with whom Quintain said it first entered discussions in September.
Quintain executive director of construction Matt Voyce said: “Quintain take the financial strength of our contractors and wider supply chain very seriously and during negotiations for a build-to-rent development at Wembley Park, Carillion issued their first profit warning.
“We were concerned that the level of loss declared, along with the huge pension deficit, would seriously impact Carillion’s ability to continue to trade and garner the support of the supply chain, increasing the likelihood that our cost and programme objectives would not be met.
“We therefore took the view that we would not proceed into contract upon the completion of Carillion’s precontract commission and commenced discussions with McAleer & Rushe, whom we have now successfully contracted with.”
The £130m deal is McAleer & Rushe’s largest ever construction contract and will see the firm build a 553-housing development on the north-west London site.
In 2016, Carillion was picked alongside three other main contractors – Sisk, McLaren and Wates – for a framework covering the £2.1bn pipeline of works at Wembley.
Quintain confirmed Carillion had now been removed from the framework following its liquidation, and told Construction News it was in early discussions with an unnamed firm over replacing the collapsed contractor.
McAleer & Rushe’s £130m contract will cover the second phase of Wembley project’s South West Lands development, following its delivery of the first phase of works worth £55m.
The contractor is also delivering the 312-bedroom Premier Inn hotel on the site, which is due for completion this summer.