Carillion will continue work on the Lincoln Eastern Bypass despite going into liquidation

Lincolnshire County Council has confirmed that Carillion will continue working on the Lincoln Eastern Bypass for the foreseeable future, despite going into liquidation this week.

County council officials are determining the best way forward following the announcement, and are expecting delays while they consider their options, the most likely being the appointment of a new contractor to manage and deliver the construction of the £96 million bypass.

Lincolnshire County Council are weighing up their options after Carillion went into liquidation this week. Photo: Shane Croucher.

Lincoln MP Karen Lee has reacted to the news, stating that the government need to now “ensure jobs, projects and the wider public sector are protected from the negative financial ramifications.”

Locally, the liquidation of Carillion poses a threat to Lincoln given that Carillion secured the contract for the construction of the Lincoln Eastern Bypass. I have approached Lincolnshire County Council for clarification of the situation and understand that Carillion contractors will continue to work on the Lincoln Eastern Bypass for the foreseeable future,” she said in a statement.

However, it is possible that due to the volatility of the situation, this could change. Notwithstanding the possibility of that happening, Cllr Richard Davies has stated that the decision in appointing Carillion contractors had been taken when share prices were good and there had been no profit warnings.”

Nationally, the impact of Carillion’s liquidation will sweep across the public sector granted contracts. Figures published in the press over recent days suggest that Carillion holds public sector maintenance contracts for upwards of 50,000 MOD houses, over 800 school buildings, approximately half of prisons, at least 10 NHS trusts, and is the second largest supplier of maintenance services to National Rail. Beyond this, Carillion also won contracts for the construction of HS2.”

Karen Lee MP believes “bringing contracts in house is the best approach to ensuring this is achieved.”

Cllr Richard Davies, executive member for highways, has said that works by other contractors on the scheme will continue too, such as works on the Anglian Water works, the new Network Rail bridge and archaeological investigations.

Cllr Davies said on the Lincolnshire County Council’s website: “Carillion will try continuing on with some bypass works for the foreseeable future. However, this situation is constantly changing and is dependent on a number of factors, including sub-contractor and supply chain confidence, as most businesses are unlikely to supply materials or labour if there is no guarantee of payment.”

Britain’s second largest construction firm, which employs 20,000 people in the UK, went bust on Monday with debts of about £1.5bn.

Carillion’s work stretched from the HS2 rail project and military contracts to maintaining hospitals, schools, and prisons.

For more information about Lincoln Eastern Bypass, visit www.lincolnshire.gov.uk/leb.

 

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