After days of teetering on the brink the company, which has been responsible for building Liverpool’s new £335m Royal Hospital, announced it was entering voluntary liquidation on Monday. Tony McDonough reports
Liverpool City Region Metro Mayor Steve Rotheram said the Government needed to get to the bottom of the collapse of construction giant Carillion.
After days of teetering on the brink the company, which has been responsible for building Liverpool’s new £335m Royal Hospital, announced it was entering voluntary liquidation after last-minute talks with its bankers failed to find a resolution.
Carillion, which employs thousands of people across the UK and had also built Liverpool FC’s new main stand, had run up huge debts of £1.5bn after losing money on major contracts.
Bosses at the Royal Hospital insist funds are available to complete the work on the site. But Mr Rotheram says urgent questions about the collapse need answering.
“There is something fundamentally wrong when a company of this size, with a number of significant contracts awarded by national Government, ends up in this position. We need to understand what went wrong and how to learn from it.
“Carillion’s collapse raises some very difficult questions around what happens to the many publicly-funded contracts, including construction of the new Royal Liverpool Hospital and elements of HS2, that it will now be unable to honour.
“There are also serious concerns over the future of all those people currently working for Carillion and around what will happen to its pension fund. As a matter of urgency the Government needs to provide clear answers to all these questions.”
The Royal is being built by special purpose vehicle known as The Hospital Company (Liverpool) and it was that business that hired Carillon as the main contractor on the project, which is already way behind schedule.
Aidan Kehoe, chief executive of Liverpool Royal and Broadgreen University Hospitals, said a few days ago: “The Hospital Company is empowered to terminate existing contracts and engage a new contractor to complete construction. The Hospital Company has access to insurance funds to enable it to complete the project.”
Liverpool Mayor Joe Anderson added: “The hospital’s management team has solid contingency plans in place to complete the project, however I wrote to the Health Secretary, Jeremy Hunt, last week before it became clear that Carillion was in trouble.
“I asked him for assurances there will be no further delays to the Royal’s opening and invited him to come up to Liverpool. I stand ready to help the trust in lobbying the Department of Health to get the project over the line.”
Carillion is a 200-year-old business and had been employed by the Government to work on around 450 projects, including the building and maintenance of hospitals, prisons, defence sites and planned high-speed rail line HS2.
The company owed around £900m pounds to banks including RBS, Santander UK, Lloyds, HSBC and Barclays and has a pension deficit of £580m.