Troubled Carillion to work on construction of HS2 high-speed rail project

Pauline Gross
July 17, 2017

Carillon Company shares had fallen by 70 per cent after its chief executive stepped down and it admitted it will take £845m of write-downs on some of its largest projects.

In a statement, FTSE 250-listed Balfour Beatty said the contracts have been awarded to its 50/50 joint venture with France's Vinci SA, with work scheduled to start in 2018/19.

As well as the civils work, invitations to tender have been issued for the line's main stations, at Euston, Old Oak Common and Birmingham.

Only five UK-owned firms, including troubled Carillion, are among the nine making up consortiums appointed today to build bridges, tunnels, embankments and viaducts.

Around 16,000 jobs will be supported by today's contracts for the first stage, which is due to be running by 2026.

Anyone travelling to work by train each day will know we desperately need extra capacity.

Carillion - along with Eiffage Genie Civil and Kier Infrastructure and Overseas - won lots C2 and C3, involving the building of tunnels, worth £724m and £616m, respectively. Alongside our own efforts, EY will provide support across the business and bring an external perspective to our cost reduction and cash collection challenge.

In early trading, Carillion shares topped the FTSE 250 leader board, bouncing 8%, or 4.55p higher to 60.70p, while Balfour shares gained 2.5%, or 6.5p at 269.4p.

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In November past year, ministers said the line should serve the existing central station in Sheffield, after proposals to run trains to the Meadowhall shopping centre were set aside.

The final route of the Manchester and Leeds arms of the railway will be confirmed later.

But this could see new homes in nearby Mexborough being pulled down, with numerous estate's residents finding out about the possibility just weeks after moving in.

He is expected to bring forward the planned completion date for the next phase from the West Midlands to the West Coast Mainline from 2033 to 2027.

"HS2 was always created to be much more than just a high speed railway and today we can see the opportunities it brings right around the country - spreading prosperity, acting as a catalyst for investment and rebalancing our economy ten years before the railway even opens". A further 3,000 people will operate HS2 network, and it is estimated that growth around new HS2 stations will create another 100,000 jobs.

Joe Rukin, Stop HS2 campaign manager, said: "The cost of HS2 has already doubled once since it was first proposed so it should come as no surprise to anyone that it might double again".

A Department for Transport spokesman said Mr Byng's claims were "incorrect" and insisted: "We are keeping a tough grip on costs and the project is on time and on budget at £55.7bn".

Other reports by GizPress

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