Carillion collapse leaves 6,000 jobs in Canada on the line

The UK may be struggling to comprehend the fallout from the collapse of its second largest construction group, Carillion, but Canada is, too: the company has approximately 6,000 employees there, and many ongoing projects.

As Carillion went into compulsory liquidation yesterday, teams on numerous Canadian hospital and infrastructure projects, as well as facilities management contracts, woke up wondering what their fate would be.

One such project was a combined 284-bed hospital and correctional facility, a public-private partnership (PPP), nearing completion in North Battleford, Saskatchewan.

Carillion had a 50% equity share in the PPP scheme, which has a development value of C$407m, and which reached financial close in September 2015.

Carillion had a stake in the construction and was to provide facilities management and maintenance for 30 years. It was due for completion this spring, although in October last year construction crews had to tear down exterior cladding to replace faulty insulation.

The consortium developing the Saskatchewan Hospital North Battleford (SHNB)  is Access Prairie Partners (APP), and it will now need to replace Carillion.

The government client, SaskBuilds, said completion of the hospital would not be affected by Carillion’s demise, but added that APP would face "significant financial penalties" if a maintenance provider is not in place in time.

"We know that APP is aware of Carillion’s situation, and they have committed to keeping the government informed as they work through it to ensure that maintenance services will be in place for SHNB with no additional cost or delay," SaskBuilds told national broadcaster CBC.

Still winning work

After revealing an £845m black hole in its finances in July last year, Carillion said it would try and get out of the Canadian market, but it was winning projects as recently as October 2017 when it announced it would be constructing four modular structures for government research programmes in the northern territory of Nunavut.

2016 saw more contracts netted by Carillion’s subsidiary, Rokstad, including a £120m contract to build a power line in Manitoba, scheduled for completion this year.

In November 2015 Carillion and its subsidiary business, the Bouchier Group, won support services contracts for a number of oil companies, including Shell and Canadian Natural Resources Limited (CNRL), and for Canada’s Department of National Defence, together worth more than £100m over five years.

Other hospital PPP projects are ongoing, such as the Stanton Territorial Hospital in Yellowknife, Northwest Territories, for which a Carillion joint venture won the contract to design, build, finance and maintain in October 2015.

At the time, Carillion said Stanton was the tenth Canadian hospital PPP it had won.

The company couldn’t make PPP pay, however. Announcing its 2017 half-year results in September that year, it said it would be "exiting all PPP construction markets".

Image: Carillion used this photograph to illustrate its announcement, in 2016, of a £120m contract to build a power line in Manitoba (Carillion)

More on Carillion:

Story for GCR? Get in touch via email: [email protected]

Latest articles in News