Builder on the brink wins £1bn HS2 contract

SHARES in Carillion rallied yesterday after the crisis-hit construction company won contracts to build part of the HS2 railway.

Transport secretary Chris Grayling was forced to defend a controversial decision to appoint the troubled contractor, which has been battling for survival, to work on HS2.

More than £580m was wiped off the builder in three days last week – but it climbed more than 19pc yesterday after the Government announced it is among the firms awarded contracts for the building of phase one of the HS2 line from London to Birmingham.

But the Government revealed Carillion’s precarious finances means it has had to seek assurance from the firm’s partners that they can complete the job if the company collapses.

Carillion’s joint venture with French constructer Eiffage and UK rival Kier has won two contracts worth £ 1.4bn to design and build the North Portal Chiltern tunnels to Brackley, and the Brackley to Long Itchington Wood Green tunnel South Portal.

The company’s share price tanked by more than 70pc last week after a profit warning and an £845m write-off on construction contracts. Its chief executive also quit. Yesterday it announced it has drafted in accountancy giant EY to help carry out a review of the business as it fights to keep a lid on debts which soared by more than £100m to almost £700m in the first half of the year.

But Grayling told Sky News: ‘They are part of a consortium. We have had secure undertakings from all the members of the consortium that they will deliver that contract.

Contracts worth £6.6bn in total were announced yesterday to build tunnels, embankments and viaducts.

Other British construction firms to secure work include civil engineer Costain.