The UK’s second biggest construction company has entered liquidation after negotiation talks between the firm, money lenders and the government failed to reach a conclusion, threatening thousands of jobs.
Carillion put the collapse down to unexpectedly high labour and material costs, though cost overruns and payment delays from the Middle East are also signalled as responsible for less profitable contracts and a massive £1.5 billion in debt.
The private construction giant was responsible for providing services to the public sector, currently working on the HS2 high-speed line between London and Birmingham and providing the second biggest maintenance service for Network Rail, which is responsible for the UK’s railway infrastructure. They were also lead contractors in a range of projects in education, healthcare and prisons, which ranged from building to ongoing maintenance.
Naturally, this has sparked fears for the more than 20,000 employees and builders in the UK working for Carillion regarding their future, though those working on public sector projects have been urged by government minister David Lidington to: “keep coming to work, you will continue to get paid,” as the Government has said that it will continue to inject funding to keep public services in motion.
However, it’s not only employees of Carillion who are left in flux, but a large number of small businesses reliant on Carillion’s business and payments. If Carillion fails to pay these businesses, as they have been doing for over four months, for their services, it is warned that they could be driven into the ground themselves, endangering yet more jobs.
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