National Grid has moved swiftly to allay fears that delivery of a string of infrastructure projects have been put at risk following the collapse of construction giant Carillion.
The UK’s second biggest building company announced this morning (15 January) it has gone into liquidation.
The collapse follows a £1.15 billion loss reported by Carillion in the first half of last year after it was forced to write down the value of three projects to the tune of £845 million due to cost over-runs and delays.
Last week the Financial Conduct Authority announced it had launched an investigation into the dramatic turn-around in the company’s accounts from the previous end of year trading statement when it had predicted strong growth in revenues and reduced borrowing in 2017.
The company’s shares were frozen this morning at 14.2p.
Carillion was working with National Grid on three major projects. These include a new build overhead line between the Canterbury North 400kV substation and a new 400kV substation at Richborough in Kent, which is designed to connect the Nemo interconnector to the grid.
This project involves the construction of 60 new steel lattice towers and the installation of the associated fittings and conductors across a 20km route, together with the subsequent dismantling and removal of an existing 132kV overhead line, including 79 towers, between the Richborough and Canterbury South Substations.
The £38 million contract was awarded to Carillion’s joint venture with Eltel Networks in August 2016 before the firm’s financial problems came to light. Work on the project is due to be completed in 2020.
Carillion is also relocating a cable at Wylfa to support the development of a new power station at the Isle of Anglesey site for Horizon Nuclear Power.
The third project is the replacement of a transformer at West Weybridge in Surrey.
However, the National Grid has plans in place to minimise disruption to delivery of these projects. A spokesperson, said: “National Grid has contingency plans in place for all its projects with Carillion, using alternative suppliers if necessary. We believe that these plans mean we will be able to keep any disruption to a minimum.”
Carillion also supports the offshore wind farm sector through services such as Front-End Engineering Design (FEED) studies to onshore cabling for offshore wind farms.