Contingencies and contractor replacements lined up for Carillion projects
Private developers are lining up contractor replacements and enacting contingency plans on Carillion’s major projects across the region, while councils have said it “remains business as usual” for public contracts following the firm’s collapse on Monday.
Public projects have been told to continue on as normal, and the Government has indicated it will step in to help fund any schemes impacted by Carillion’s collapse.
These include the second phase of Vision Tameside, an overhaul of a site in the centre of Ashton to deliver new teaching facilities for Clarendon Sixth Form College, a centre of excellence, an advanced skills centre, and a joint public service centre for Tameside Council.
Carillion completed the first two buildings – the sixth form college and centre of excellence – in 2016 in its Local Education Partnership role with the council, and then started work on the second phase, which sits behind Ashton Town Hall.
It includes a 75,000 sq ft advanced skills centre and a new home for the council’s public services. Construction of the steel frame has already completed, with subcontractors working on site to complete the roofing, curtain walling, cladding and brickwork.
Carillion was also lined up for the next phase, the redevelopment of the Beaufort Road Campus into new teaching facilities for engineering, construction, and the built environment among other disciplines. This is likely to be re-procured following Carillion’s collapse.
As well as construction, Carillion also delivered services including school meals, facilities management, and events services across the borough.
A statement from the council said: “Since the announcement of the liquidation of Carillion we have sought assurances for both the staff employed in Tameside by Carillion and local people who use services that are dependent on the Carillion workforce.
“Assurances have been given regarding public construction projects such as Vision Tameside. Vision Tameside falls into the public sector contracts category and so with the assurances provided to suppliers, work will continue on site.
“While we continue with our contingency plans and securing business continuity here in Tameside, we also need to start planning for a longer term and sustainable solution.
“With this in mind, as we seek further information from the Government, Carillion and PWC on the detailed arrangements they are making for supporting public sector contracts we are also developing local plans.”
In contrast to public sector projects, work has stopped or stalled on a series of high-profile schemes in the North West, but developers and clients have said that work will continue either with contingency plans or with different contractors in place.
These include the £154m Angel Gardens, a 36-storey, 466 apartment scheme in Manchester, which was due to be delivered over two phases between 2019 and 2020.
Place North West understands Moda has enacted a contingency plan for the scheme and does not expect there to be any major delay. The project is funded by a joint venture of Moda and Apache Capital Partners, having secured an £85m development loan to back construction in January last year.
Moda had also reportedly lined up Carillion to build The Lexington in Liverpool, an £80m, 35-storey tower forming a key part of the wider Liverpool Waters development. However, the developer said that Carillion had never formally been appointed, meaning the scheme is likely to go ahead as planned. A main contractor and start date are yet to be confirmed.
Another private rented scheme, next to The Slate Yard in Greengate, was also nearing completion when Carillion collapsed this week. The project, brought forward by the English Cities Fund as its second private rented scheme, made up of 135 apartments, is nearing completion.
In a statement to Place North West, Phil Mayall, development director for ECF, said: “Construction is eight weeks from completion, with the vast majority of works already complete.
“We are working closely with our partners, consultants and sub-contractors to identify the best solution to continue and complete works with as minimal delay as possible.”
Carillion was also in the frame for two major commercial schemes in Manchester with its former Ask Real Estate development arm, which was sold to Dukehill for £13.8m last year.
Carillion previously delivered 101 Embankment at Greengate in Salford, which is now fully let to insurance giant Swinton, and was expected to build the next office, 100 Embankment, for Ask. However, it is understood that the developer has been in conversations with a different contractor for a number of months following Carillion’s profit warning in July.
At Found Space, the £300m “sister towers” for the Beetham on the site of the former Bauer Millett showroom, Carillion was confirmed as main contractor last year in spite of its profit warning.
The mixed-use scheme includes towers of 40 and 16 storeys in height, with 375 apartments in the former and office space in the latter, with ground floor commercial uses in both.
Like at 100 Embankment, Place North West understands the developers are still looking to bring forward the project, subject to funding, but with a different contractor team on board.
Other projects include No8 First Street, where agent GVA said there was a “robust contingency plan in place”. Despite the scheme already being delayed, following the collapse of its cladding subcontractor Lakesmere, GVA said it did not expect there to be further setbacks to the project’s timescale. Lakesmere was replaced as cladding contractor by FK Group late last year. A project manager is now expected to be appointed to oversee the final phase of construction.
Manchester Airport Group, which has a joint venture with Carillion, the Greater Manchester Pension Fund and Beijing Construction Engineering Group on Airport City, said construction work on the project “is not affected by the issues at Carillion” as it is being undertaken by BCEGI.