The construction company Carillion has announced that it will go into liquidation. Government-backed attempts to negotiate a deal to save the company failed, according to BBC News.
The contractor is the UK’s second largest construction company but it ran into trouble after incurring large debts and losses on major projects. The collapse of the company will also threaten many smaller firms owed money by the contracting giant.
Carillion is involved with many high-profile projects including HS2 high speed rail line and the construction, running and maintenance of schools, hospitals and prisons. It is the second-largest supplier of maintenance services to Network Rail and it maintains 50,000 homes for the Ministry of Defence.
The company employs 43,000 staff worldwide, with 20,000 based in the UK. Carillion chairman Philip Green said the liquidation was a “very sad day” for workers, suppliers and customers of the company.
There are also concerns for Carillion workers’ pensions. The pension fund for employees has a deficit of almost £600m and will now be managed by the Pension Protection Fund or PFF.
Bernard Jenkin, Conservative Chairman of the House of Commons Public Administration Committee, said the collapse “really shakes public confidence in the ability of the private sector to deliver public services and infrastructure.”
Jenkin said: “You’ve got to treat yourself much more as a branch of the public service, not as a private company just there to enrich the shareholders and directors.”