HS2 contract safe say Carillion’s former joint venture partners

The HS2 project awarded to collapsed construction group Carillion is safe, its partner in the joint venture has said.

Fellow constructor Kier, which was JV partner alongside Carillion and Eiffage, said the two remaining partners in the venture would now deliver the contract on a 50/50 basis.

In addition, all the Carillion employees involved in the planned venture have been offered the chance to transfer to the new partnership.

In a trading update designed to reassure investors in the wake of the Carillion collapse, Kier said its infrastructure and regional building projects were all progressing as planned.

It said: “On HS2, Kier and Eiffage are now 50/50 joint venture partners delivering two of the seven civil engineering packages, lots C2 and C3. All 51 Carillion employees, including apprentices, working on the CEK HS2 joint venture have been offered the opportunity to join Kier/Eiffage with continuous service to the client being maintained.”

Kier said it had also assumed full responsibility for the Highways England smart motorway schemes on which it had been working as a joint venture with Carillion.

“All employees currently working on the schemes have been offered the opportunity to join Kier. In total c.150 employees will be making the transition to Kier in the next week including seven apprentices. Engagement with the existing supply chain on this project has also taken place, again ensuring continuity of skills, resources and suppliers.”

An additional £140m of infrastructure contracts not involving Carilion, were also progressing as is a £160m Public Health England contract award in Essex.

Haydn Mursell, chief executive of Kier, said: “We have been working collaboratively with our clients and are pleased to have reached agreement with Government concerning these joint ventures. We have been able to take action quickly and reassure the project teams that they continue to play an important role in the delivery of these contracts.”

Fallout from the collapse of Carillion is set to continue dominating the economic and political agendas this week.

The government has been urged to crackdown on company bosses mismanaging their operations in an effort to prevent similar collapses.

While the chairman of one of Britain’s biggest construction‎ groups – James Wates, of Wates Group – is thought to be in line to head a new government initiative aimed at formulating a corporate governance code for private companies.

Ironically, Andrew Davies, who resigned from Wates Group last year, was due to start work today (Monday) as Carillion’s new chief executive.