A14 improvement work completion promise is needed amid news that Carillion has gone into liquidation
- Credit: Archant
A politician has called for a promise that the A14 works will be finished following news that a contractor working on the job has gone into liquidation.
Carillion, one of the government’s biggest contractors, collapsed today (Monday 15).
The firm, also responsible for facilities management at Whitemoor Prison in March, has been struggling under £1.5bn of debt.
It is one of the companies delivering the A14 Cambridge to Huntingdon improvement scheme.
Alex Mayer, Euro MP for the eastern region, said: “Carillion has been on the rocks for months but the Government has buried its head in the sand.
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“Jobs, vital infrastructure projects and public services are now at risk.
“We need urgent assurances the A14 improvements will not be delayed.
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“Sooner or later the Government must call time on the repeated failures of the private sector.”
The stricken company said it had “no choice but to take steps to enter into compulsory liquidation with immediate effect” after talks failed to find another way to deal with the company’s debts.
Carillion, which employs 20,000 workers across Britain, said crunch talks aimed at driving down debt and shoring up its balance sheet had failed to result in the “short term financial support” it needed to continue trading while a deal was reached.
The business has been struggling under £900m of debt and a £590m pension deficit, has seen its shares price plunge more than 70pc in the past six months after making a string of profit warnings and breaching its financial covenants.
Carillion is responsible for facilities management at prisons including Norwich, Wayland, Bure, Whitemoor in Cambridgeshire, Hollesley Bay and Highpoint in Suffolk and Chelmsford, and at other locations including Ipswich Crown Court.
Chairman Philip Green said: “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.”
The company is understood to have public sector or public/private partnership contracts worth £1.7bn, 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.
As a result, the Government has been under increasing pressure to intervene to prevent the collapse of the company.
Unions are calling for urgent reassurances over the jobs, pay and pensions of thousands of workers following the “disastrous” news.
Officials from several unions representing workers on the railways, construction sites, prisons, hospitals and schools are seeking information from the company and ministers.
Rail, Maritime and Transport union general secretary Mick Cash said: “This is disastrous news for the workforce and disastrous news for transport and public services in Britain.
“The blame for this lies squarely with the Government who are obsessed with out-sourcing key works to these high risk, private enterprises.
“RMT will be demanding urgent meetings with Network Rail and the train companies today with the objective of protecting our members jobs and pensions.”
In November last year Carillion announced it had been awarded two contracts on Network Rail’s Midland Mainline improvement programme, including one to upgrade the existing track and infrastructure from London to Corby.
Network Rail said in a statement: “Passengers can be reassured that their services will be running as normal as Carillion’s work for Network Rail does not involve the day-to-day running of the railway.”
Shadow business secretary Rebecca Long-Bailey said there were “extreme concerns” about the Government’s handling of the situation and said Whitehall should take Carillion contracts back in-house.