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Carillion rail suppliers 'will not be paid' for work before liquidation

Carillion has confirmed its suppliers will not be paid for any work carried out before the firm went into liquidation, Construction News has learned.

In a letter obtained by CN, Carillion Rail’s supply chain manager James Charlesworth told suppliers that outstanding bills for any goods or services provided before its liquidation on Monday would not be paid.

Mr Charlesworth writes: “I’ve now had absolute clarity from PwC that they are not paying for goods/services provided before the liquidation date (assumed to be yesterday 15th).

“You will have to contact to follow up on previous invoices/certified applications as explained in the attached.

“PwC have stressed that they will pay for services/goods for future works for suppliers that currently have orders in place who are delivering works on site and for future orders once appointed.”

Carillion is currently Network Rail’s second biggest supplier and is currently delivering a number of key electrification projects on the Midland Main Line, the North-west hub and the Shotts line between Glasgow and Edinburgh.

A number of Carillion’s key suppliers will be exposed to the unpaid work and are likely to be hit for millions of pounds in outstanding payments.

The unpaid work would likely cover the Christmas period, a time when a large proportion of Network Rail work is carried out.

Earlier this week Network Rail had said: “Carillion’s work would continue for the time being as Network Rail works with the official receiver and special manager to ensure the continuity of its project work.”

In his letter, Mr Charlesworth: “A list has been sent to PwC of the suppliers that fall into this category and they will be contacting you directly with a form of acknowledgement that you will be required to sign so that they can pay you.

“For suppliers providing on a material-only basis, there is facility of paying you via our P-Card should it allow you to re-commence deliveries/production. Please contact me directly regarding this.

“We fully understand and share your frustration with this predicament, we have a wealth of work to deliver in a very difficult environment.

“I and the commercial teams will be contacting you individually to understand your position for completing the outstanding works and your desire to continue to participate in the new, and hopefully we can find a resolution to keep things moving forward.”

The official receiver has been contacted for comment.

Readers' comments (3)

  • Lost. For. Words.

    Unsuitable or offensive? Report this comment

  • Non payment for works up to liquidation standard practice.
    Imagine claims, if they treated some parties as preferential creditors.
    What we need to see is the people in power, directors, made to pay back all their salaries and benefits.
    Like that is going to happen, slap on the wrist and told they can't hold a directership for say a year.

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  • Unbelievable

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