Rok projects put on hold as talks start with suitors

WORK on tens of millions of pounds of contracts being carried out by failed building company Rok in Scotland has been suspended as talks with potential buyers continue.

Rok, which owed its bankers including Royal Bank of Scotland and Clydesdale Bank around 60 million, went into administration on Monday raising fears over its 3,800 strong workforce including more than 750 in Scotland.

Yesterday administrators at PricewaterhouseCoopers, who were called in by directors rather than the banks, announced that work on existing contracts had been temporarily suspended although employees continued to be paid.

Alan Brown, director of business recovery services at PwC in Scotland, said there had already been significant interest in the company and in its Scottish interests.

"We are as a matter of urgency carrying out a review of the business, and as part of this process are liaising closely with individual customers," he said.

"We have taken the decision that in the short term, while these discussions are under way that work on existing contracts is temporarily suspended."

Among the major Scottish projects where Rok's work has stopped include brewing and distilling giant Diageo's 86m bottling plant in Leven and a 65m bio-energy plant for the company's Cameronbridge distillery.

A Diageo spokesperson confirmed that building work had ceased at both sites where Rok is the civil construction contractor.

"We are currently engaged in urgent talks about the next steps and looking at how we can recommence work as soon as possible."

Highlands & Islands Enterprise, which only last month awarded Rok a 32m contract over four years to carry out most of its building work across the region, has also seen work suspended on projects including a renewable energy manufacturing plant in Machrihanish in Argyll. Almost half of Rok's Scottish workforce was based in the Highlands.

Meanwhile, construction firm Morgan Sindall - one of those tipped to have expressed interest in buying parts of Rok - yesterday said it was on track to meet its full-year targets. The company said it expects its buyout of failed social housing group Connaught's assets to add 100m to 2011 revenues although the full benefits in terms of profit wouldn't be seen until 2012.

Major contracts recently won by the firm in Scotland include a new manufacturing plant for Glasgow-based temporary power company Aggreko and it also involved in a joint venture bid for the second Forth Road crossing.

Another construction firm which acquired contracts from the Connaught collapse, Mears, has already expressed interest in some of Rok's contracts.