Carillion: Major Midlands projects left in limbo as scramble begins to find new contractors

The company’s logo has been a familiar site on the motorways around the region in recent years, working on the Smart Motorways project. This has included new cameras to monitor traffic, new electronic signs on hundreds of new overhead gantries and the widening of the motorway to enable drivers to use the hard shoulder at times of congestion.

Work on the M6 has been continuing into Staffordshire and Cheshire and will be carried on by its project partner Kier and the Government’s Highways England agency.

Other contractors will also have to pick up Carillion’s share of the work on the A50 Growth Corridor in Staffordshire.

Meanwhile Sandwell and West Birmingham Hospitals Trust will now have to find a company capable – and willing – to take on the £350 million Midland Metropolitan Hospital scheme.

Already a year behind schedule under Carillion, the trust is keen to press on.

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Toby Lewis, the trust’s chief executive, said: “We have worked together for over a decade to develop the plans to invest more money into primary and community care, and redesign acute care. That plan is ‘two thirds built’ with the new hospital, and partners are anxious to re-establish timescale clarity. We are working to do just that with The Hospital Company, and now with PwC and government officials.

“We welcome the commitment to project continuation offered yesterday in Parliament, which has reassured staff, working to provide NHS care here, that this overdue project remains a priority.”

Meanwhile one of the biggest redevelopment projects in Birmingham, the £700m city centre Paradise scheme, saw work halted this week. Carillion has been working on the first office block, One Chamberlain Square, as well as infrastructure for the site as a whole. Accountants PwC – with some irony the firm currently handling Carillion’s liquidation with the Official Receiver – is due to move in next year.

Rob Groves, regional director for the Paradise development managers Argent, said: “Work is momentarily paused while we finalise the next steps with contractors and sub-contractors to complete the site wide works and One Chamberlain Square.

“To maintain the integrity of the site and to meet health and safety obligations we will restrict access to the site until all the proper procedures are in place. We anticipate that work on some parts of the site will start within a week.”

He said earlier: “We are confident that One Chamberlain Square will not be adversely affected. The site wide works are now over 80 per cent complete and BAM will be on site in February starting construction of Two Chamberlain Square as programmed.”

Controversy

While the Government has urged Carillion staff to work as normal – and the 400 staff at its Wolverhampton headquarters are being retained temporarily to help with the complex insolvency – the money to pay those working on private contracts runs out today.

But money will keep flowing to maintain public sector work on road and rail.

Carillion was controversially awarded a £1.4 billion slice of work on the HS2 rail scheme last year – after it had revealed the first of three profits warnings – including work on two tunnels. Contracts were signed in August and now its partner companies in the scheme, Eiffage and Kier, will take up Carillion’s share of the work.

Carillion has also secured a string of contracts with Network Rail, most recently £320m to improve track and complete electrification of the Midland main line. It has also worked on a £374m major track replacement programme in the last few years. It also provides maintenance on the London Overground network. It also had a £100m share of the work on Crossrail.

Carillion had also been working on £225 million of projects at schools around the Midlands under public private partnerships. Under the Midlands Priority School Building Programme it has been replacing buildings at eight schools across the region including the recently completed work at The Phoenix Collegiate School in West Bromwich. Carillion had also been due to provide maintenance at the school.

The company also transformed secondary education in Wolverhampton as the contractor for the £270 million Building Schools for the Future programme, which saw more than two dozen schools across the city undergo major revamps or get completely new school premises.

It had also just completed work last year on the University of Birmingham’s new student residential scheme, Bournbrook, providing 178 new students bedrooms. It also worked on the university’s £42 million library.

Carillion also received a string of plaudits for its work on the £188 million Library of Birmingham.

As part of its work for the Ministry of Defence, Carillion built a 148-bed accommodation block at Whittington Barracks, near Lichfield, and its CarillionAmey joint venture maintains the Clive Barracks Army housing estate at Tern Hill in Shropshire.