Second major Scottish government contractor faces collapse

Emergency plans are being drawn up by Scottish public organisations if the ailing government contractor Interserve goes into administration.

Contingency plans are in place to protect the animals at Edinburgh Zoo. Pictue: Edinburgh Zoo

The construction and facilities management firm faces a crucial shareholder vote on its future tomorrow.

If it collapses, the impact could hit major Scottish projects including the £22 million redevelopment of the National Gallery in Edinburgh and the £9m improvements to the vital A737 route from Paisley into Ayrshire.

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It would also force the home of the Chinese pandas, Edinburgh Zoo, to find a new contractor for night-time security as well as affect the maintenance of the Scottish National Blood Transfusion Service’s Jack Copland Centre.

Interserve employs 45,000 people in the UK and earns two-thirds of its £2.9bn turnover from UK Government contracts. The news of its potential collapse comes just a year after Carillion, the UK’s second largest construction company employing 20,000 people and also reliant on government contracts, went bust.

Interserve’s major contracts in Scotland are the redevelopment of the basement levels of the National Gallery, the construction of an Avian Research Centre for Scotland’s Rural College (SRUC) in Midlothian, the maintenance of the Jack Copland Centre and the A737 improvement works.

The Scottish Government said it was “monitoring the situation closely” and was in “regular contact with relevant public sector bodies who have current contracts with the company”.

It is understood that Transport Scotland is confident it could procure a new contractor to complete the A737 in line with EU rules despite shortened timescales if Interserve does go into administration.

A spokesperson for NHS National Services Scotland, which runs the blood transfusion centre, said plans were in place to “manage a service provider insolvency event”.

The National Galleries of Scotland said they were monitoring events closely as well as liaising with external advisors in terms of any steps which “we may need to take following Interserve Plc’s extraordinary meeting of shareholders”.

At Edinburgh Zoo, where Interserve provides night security, a spokesperson stressed that “contingency plans” were in place and the security of the zoo would not be compromised.

The SRUC said its new centre was almost complete and unlikely to be affected, but that it had processes to “reduce financial risk”, including “a bond, in case a main contractor ceases trading”.