HS2 seeks guarantee on crisis-hit Carillion

HS2 seeks guarantee on crisis-hit Carillion

The government was forced to seek assurances from Carillion's partners on the HS2 project that they can step in to deliver on the work if necessary after the company warned on profits.

Carillion is part of a joint venture that has won a bid to design and build part of the ?56bn high speed rail link.

But last week its chief executive stepped down and the firm warned results would fall short of forecasts.

A spokesman for HS2 Ltd said it was "confident" in the joint venture.

He said: "Obviously in the light of last Monday's announcement by Carillion, HS2 has carried out additional due diligence and sought re-assurance of both it and its two partners in the joint venture - Kier and Eiffage - that they remained committed and able to deliver the contract.


"Each company's boards have both given that assurance and confirmed that they underwrite the performance of each other in delivering the contract. And that is the key point. HS2, of course, will continue to monitor the situation."

Carillion disclosed on Monday that it had appointed consultancy firm EY to help with a strategic review of the business "with a particular focus upon cost reduction and cash collection".

Under its interim chief executive Keith Cochrane, Carillion said it was taking immediate action to generate significant cashflow in the short term and cut its debt.

Carillion's share price jumped by 23.33% to 69.25p, but it still remains far below the pre-profit warning level of 191p.

The consortium of Carillion, Kier and Eiffage of France is one of a number of partnerships that have won contracts to build tunnels, bridges and viaducts between London and Birmingham for the first phase of HS2.

The spokesman for HS2 Ltd pointed out that each of the contracts had two parts, beginning with a 16-month design period where the government and the joint venture work closely together before starting on the second construction phase.



Add Comment

all comments

  Other news

more
Senate rejects plan to repeal Obamacare without replacement

Senate rejects plan to repeal Obamacare without replacement..

26-Jul, 19:00

The US Senate has failed to pass a Republican proposal to repeal...

‘Terribly bad mistake’: US Senator says Russia sanctions go against EU energy security & free trade

‘Terribly bad mistake’: US Senator says Russia sanctions go against EU energy security & free..

27-Jul, 01:10

The essence of the new anti-Russian sanctions awaiting Donald Trump’s...

Law Roach loves dressing Jada Pinkett Smith in metallics

Law Roach loves dressing Jada Pinkett Smith in metallics..

27-Jul, 13:20

Law Roach loves dressing Jada Pinkett Smith in metallics by...

TSA to enact stricter electronic screenings at all US airports

TSA to enact stricter electronic screenings at all US airports..

26-Jul, 21:30

Airport screenings are about to become even stricter for people traveling...

California tortoises died trying to reproduce during drought

California tortoises died trying to reproduce during drought..

17-May, 17:08

Scientists examining the deaths of female desert tortoises in Southern...

Trump tweets video of him attacking CNN logo

Trump tweets video of him attacking CNN logo..

02-Jul, 10:31

President Donald Trump took his feud with the media to a new level Sunday...

Uber adds option to tip drivers as it heads in new direction

Uber adds option to tip drivers as it heads in new direction..

20-Jun, 14:55

Uber is enabling passengers to tip its U.S. drivers with a tap on its...

Prince Jackson explains his personal connection to foster youth

Prince Jackson explains his personal connection to foster youth..

27-Apr, 04:32

Prince Jackson is giving back to those who have aged out of the foster...