Carillion collapse hurts thousands of contractors

THE COLLAPSE of British services group Carillion started to hurt thousands of small contractors yesterday, with some laying off workers after the rapid demise of a company that was winning state contracts as recently as November. Rudi Klein, head of Britain’s Specialist Engineering Contractors’ Group, estimated that Carillion had left a trail of £1.2 billion (R20.37bn) in unpaid bills to thousands of small subcontractors. The 200-year-old company, swamped by debt and pension liabilities and losing cash, went into liquidation on Monday, threatening suppliers, merchants and big banks. The government was forced to guarantee the provision of public services from school meals to road projects. Examples of private companies that could be hit included a small Northern Irish engineering contractor owed £150 000 and a concrete frame manufacturer in North West England owed £2 million, Klein said. Flora-tec, a corporate horticulture company based in Cambridgeshire, eastern England, said it is owed more than £800 000 for its work on Carillion contracts at local prisons, schools and hospitals. “Last month, when we were knee deep in snow, my guys were out at three in the morning putting salt down to make sure the facilities were safe for people to use,” managing director Andy Bradley told BBC radio. “We’re not going to get paid for that.” Britain began outsourcing public services in the late 1980s under Margaret Thatcher.