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Ground-related issues contributed to Carillion cost overruns

Cost overruns have been linked to ground related issues on two out of three major cited as the main drivers behind Carillion’s downfall.

These projects, along with large pension deficits and contact issues in the Middle East, are said by analysts to have led to significant losses that led to company to go into liquidation on Monday.

royal liverpool hospital

royal liverpool hospital

Asbestos in the ground led to delays on the Royal Liverpool Hospital

The three projects are the £335M Royal Liverpool Hospital, £745M Aberdeen Western Peripheral Route and £350M Midland Metropolitan Hospital in Sandwell.

Opening of the Royal Liverpool Hospital has been pushed back by a year due to delays caused by extensive asbestos on site and cracks forming in the new building. The facility was due to be completed in spring 2017 but building work was not expected to be finished until next month and the opening date is now slated as summer 2018.

Speaking when the delays were revealed in March 2017, a spokeswoman for Carillion said: “The construction of such a building on a brownfield city centre location is a very complex process and we have encountered some issues which have unfortunately led to a delay in handover to the trust.

“The amount of asbestos found was significantly more extensive than initially thought and therefore took much longer to remove.”

Delays on the Aberdeen Bypass, which Carillion is delivering in joint venture with Balfour Beatty and Morrison Construction meant that opening of the new Transport Scotland-funded route was pushed back from spring last year to this winter. The Scottish government said at the time that the contractors “failed to get earthworks completed and this has had a knock-on impact on the programme of approximately nine months”.

Balfour Beatty and Morrison are expected to meet the £60M to £80M that Carillion was expected to contribute on the Aberdeen bypass project. Details of how the liquidation will affect the other two schemes is not yet clear.

 

 

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