What the Carillion collapse means to Scotland

The Scottish Government has said contingency plans are in place for major contracts north of the Border affected by the liquidation of Carillion.

Carillion projects could be at risk. Picture; PA

A planned platform extension at Edinburgh Waverley and the new £745m Aberdeen bypass are among the most high profile works which could be impacted by the collapse of the Wolverhampton-based company.

The giant firm also has two facilities management contracts with the Ministry of Defence (MoD) worth £158m which cover 83 military sites in Scotland.

Transport Scotland said today’s announcement would not impact on the delivery of the long-awaited Aberdeen western peripheral route (AWPR).

Economy secretary Keith Brown said the Scottish Government has been working to manage or eliminate risks associated with Carillion’s difficulties since July last year.

The bombshell liquidation announcement came after talks between the firm, its lenders and the Westminster government failed to reach a deal to save what is the UK’s second biggest construction company.

Thousands of jobs across the country are at risk, but MP David Lidington told the BBC that public sector contracts would continue.

“All employees should keep coming to work, you will continue to get paid. Staff that are engaged on public sector contracts still have important work to do,” he said.

In a statement, Mr Brown said: “Our first thoughts are with those Carillion employees who will be concerned for their jobs today and we are in discussions with the liquidators and the UK Government regarding the measures they intend to put in place regarding private sector, Network Rail and UK Govt backed contracts in Scotland to support Carillion employees and to secure the completion of these contracts.

“The Scottish Government has been working to manage or eliminate risks associated with Carillion’s difficulties since July last year and we have contingency plans in place for affected contracts, including the AWPR where the contract contains a mechanism for the remaining two joint venture partners to deliver the project and we expect that work to continue.

“I have spoken to the Secretary of State for Scotland this morning and my officials have also spoken with PwC to establish the situation and should it be necessary we stand ready to support for any affected employees through our Partnership Action for Continuing Employment (PACE) initiative which aims to minimise the time individuals affected by redundancy are out of work.”

Carillion chairman Philip Green said: “This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years. “Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future and the board is very grateful for the huge efforts made by Keith Cochrane, our executive team and many others who have worked tirelessly over this period.

“In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.

“We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.”

Carillion: Everything you need to know

:: In 1999 the Tarmac Group demerged into a building materials company: Tarmac, and a service provider: Carillion.

:: After 1999 it went on to acquire further well-known companies including Mowlem in 2006, Alfred McAlpine in 2008, Vanbots in 2008, and Eaga in 2011.

:: The company employs around 43,000 globally - around 20,000 in Britain - and has its base in Wolverhampton.

:: The firm is understood to have public sector or public/private partnership contracts worth £1.7 billion, including providing school dinners, cleaning and catering at NHS hospitals, construction work on rail projects such as HS2 and maintaining 50,000 army base homes for the Ministry of Defence.

:: In the UK some of its projects have included the Royal Opera House, the Channel Tunnel, Tate Modern, the Library of Birmingham and the famous doughnut building of the UK’s Government Communications Headquarters (GCHQ).

:: Internationally it has been responsible for Oman’s parliament - the Majlis, Alvito Dam in Portugal and the Yas Marina Hotel in Abu Dhabi.

:: As recently as January 2, Carillion celebrated the completion of what it described as “another successful project” at Edinburgh Waverley Station.