And here we go again – uninformed posts, cheap points scoring.

How few of the the opinionated posters have any hands-on experience of civils pricing, risk management, difficult clients and construction project delivery?

It’s simple to quote from media sources – most of whom have no inside information and are definitely not construction professionals.

I’m all in favour of informed and intelligent discussion – if you qualify, please contribute.

For the rest, I would sum it up as piss and wind .

Piss and wind seems to have figured quite significantly in Carillions businesss plans. Such as they were.

But then i’m not an expert.

I’ll bow out and leave it to those who understand such complex matters….

I know nowt about such things. But then again nobody has ever offered to pay me 660 grand a year, plus bonuses to pretend that I do

Perhaps I went to the wrong school

It looks like Interserve may be in a spot of bother as well.
Yep

Also heard that on the grapevine

Grapevine also known as industry press and formal communications to the market…?

Frank, I have worked in the sector on two occasions for a number of years – albeit not in frontline roles, so hopefully won’t be counted in the uninformed. The whole sector is in trouble and frankly poisonous. A group of companies steadily decreasing in number competing for work, contracts competed for below cost to gain market share, poor risk management, I could go on…

How few of the the opinionated posters have any hands-on experience of civils pricing, risk management, difficult clients and construction project delivery?

over 22 years in the construction industry
12 years site & Project Management & 10 years in an Estimating / Estimating Manager role for 2 major contractors, internationally
I have been involved with projects up to £450 million, often in direct competition with Carillion
We have strict governance and risk management procedures that have been strengthened and reinforced alot over the last 2 years since we had our own profit warnings, it is clear that Carillion did not

Interesting piece on the industry view of this cluster****. This was my earlier point about industry also being the victims of austerity and ideology-driven privatisation. The government is not just a ‘customer’ as the idiot May suggested, it’s the most important stakeholder with a vested interest in the success of the projects it funds. It can’t just wash it’s hands and say ‘well a contract is a contract’.

This was my earlier point about industry also being the victims of austerity and ideology-driven privatisation.

I don’t totally buy into this, one of the 4 contracts that led to it’s demise was in Qatar, so nothing to do with the UK. And I don’t think the Aberdeen bypass issues have anything to do with austerity either.

I don’t totally buy into this, one of the 4 contracts that led to it’s demise was in Qatar, so nothing to do with the UK. And I don’t think the Aberdeen bypass issues have anything to do with austerity either.

its always going to be a factor

but there was a government own report quoted on newsnight on Tuesday? that warned austerity had reduced profit margins for big infrastructure projects and that it was in danger of making outsourcing unviable and obviously damaging to the country when its such vital infrastructure.
This leads to comanies getting desperate and bidding as low as possible on everything to secure work, gambling on everything working out.
Obviously austerity only a factor among others
IIRC half of Carillions huge debt write-off last year was foreign/half UK based

And I don’t think the Aberdeen bypass issues have anything to do with austerity either.

Tiny profit margins with no contingency. The losses on the Aberdeen bypass were down to nothing more than delays caused by Scottish weather. It pretty obvious that the govt should not award these sort of contracts on such ridiculous terms and conditions. Like I said, dismissing it by saying ‘we were just the customer’ is a complete abdication of any responsibility for the completion of the project, the sustainability of the firms undertaking the work, or the affect on the wider community. I’m not defending Carillion, they clearly should have not taken on such risky contracts. But firms like Carillion are under huge pressure to take on this sort of work, and the govt encourages them with promises of future contracts and a blind eye to the avaricious practices of senior management.

theres also been warnings since last year that Brexit workload meant that civil servants were too busy to scrutinize outsourcing contracts and just rubberstamping them

https://www.ft.com/content/fa80d526-1b7a-11e7-a266-12672483791a

If the govt were responsible clients they’d be considering very carefully whether the contractors were in a position to complete the work and whether the risk they were taking on threatened their survival. Clearly they didn’t do this in the case of Carillion. Heard a rumour the other day that the firm I work for is owed 1.1M by Carillion, but that’s only a fraction of what we are owed by the UK Govt who are top of our bad debtors list. ‘Party of business’ my a*se.

Yeah, the Maybots chosen angle at PMQ’s of ‘we are simply customers of Carillion’ isn’t going to wash with anyone

At the end of the day the government are custodians of taxpayers money, and there’s a responsibility that goes with that.

As it was known widely that Carillion was in serious trouble, it’s totally irresponsible to be just handing them more contracts, crossing your fingers and hoping for the best. Which seems to have been what’s happened.

They’re hostages to their ‘free market’ ideology

Does anyone actually believe that this cluster**** isn’t going to end up costing us a bloody fortune? Though as with the East Coast Mainline Virgin/Stagecoach debacle, they won’t actually use the word ‘bailout’, despite that being exactly what it is

Aberdeen bypass was awarded by Scottish Transport, not the UK central government, and at at the end of the day it’s continuing due to being a consortium.

Grapevine also known as industry press and formal communications to the market…?

Could be but was mentioned to me by a mate in the industry who’s pretty switched on.
(We drink and talk shop a lot we’re very boring)

At the end of the day the government are custodians of taxpayers money, and there’s a responsibility that goes with that.

I think for me this is what I see as the fundamental thing our politicians got wrong – good value does not mean cheapest, and responsibility for taxpayers money comes before pals in business and profit.

Too many of these private ‘partnerships’ seem to revolve around extracting more taxpayers money, for transferring risks over, yet to inflate turnover and profit, not improve quality and longevity.

I can also see more and more of the ‘partnerships’ bailing out over the next few years – see the trains, see the issues of many school or hospital buildings and service contracts in so many industries. The getting out will be through the ripples caused by Brexit and other business such as Carillion, combined with forgetting that with the contract comes that transferring of risk.

thatd be like paying £3 to join labour & voting for corbyn because itd mean no one will vote for them- Id suggest you look at cranberrys posts at the start of the corbyn megathread

That £3 has brought me a lot of laughs and not a little consternation at the stupidity of the nation’s youth.

I’m no Corbyn lover, but to expect the nations youth to vote for a party that has f*cked them over in the last seven years, now that would have been stupid.

I’m not always Larry’s biggest fan, but this is a sensible piece cutting through a lot of the noise:

https://www.theguardian.com/commentisfree/2018/jan/17/lessons-carillion-crisis-pfi-public-finance-initiative

Don’t anyone kid themselves on for a minute that had the government given these companies any more money when awarding the contracts that the service would be any better or the staff and subbies treated any better. All that would happened is the directors and shareholders would have taken even more money and corners would still be cut.

IMHO it’s not a bad thing they went down the pan. These types of companies are getting too big and the way they have all been going the past decade the end game seems to be buying each other up till there is only one huge company left with all the contracts. Far better to have more smaller sized companies taking on these contracts and pay a bit more for better service. This would make life better for everyone involved except the directors and shareholders of the super sized companies, and well **** them.

Frank having had experience of advising Carillion site managers in London I’m surprised it took as long as it did for them to go down the tubes. The only other MCG principal I worked with as bad was Shepherd at UCL and they were bought by Wates in 2015, god help them. The only thing the sites were missing were the rails for hitching the cowboys horses to.

Sandwich, my experience with them is that they were a sound company before Howson got the top job. That view was widely held by senior engineers and senior project managers I worked with; these guys had been with the company for long enough to form sound opinions.
It’s clearly tempting to politicise their demise but I think that’s the wrong approach.

And here we go again – uninformed posts, cheap points scoring.

A bit like Carillion’s approach to risk management and cutthroat pricing on contracts paid for out of my tax bill then.

Don’t politicise it?

It has to be politicised! What this proves is that the prevailing logic of the ongoing privatisation of public services is just not working, and not delivering for anyone other than the people on the boardroom.

Virgin/Stagecoach and now Carillion have demonstrated that the principles of austerity and private supply of public services are mutually incompatible.

You can have one or the other, but not both

I’d like my politicians to deal with reality rather than ideology

Unfortunately, neither of the main parties look like that’s on their agendas any time soon.

One advocated publicbad/private good, the other the opposite. And they’ll just shout that at each other.

The solution needs to be a sensible combination of the two, and a bit more nuanced

I won’t hold my breath

I worked on a government project once via a consultancy. The consultancy in question were utter cowboys on the ground, the staff were totally under trained and under skilled (not their fault though). The terms of engagement were such that we were unable to work effectively. Eventually, after a year or two the consultancy was fired, but they successfully sued the government for lost revenue.

That’s the state of affairs we’re dealing with – when government contractors end up doing stuff like that.

I really don’t think we can criticise Transport Scotland for running an effective competition on the Aberdeen bypass; imagine the furore if they had not chosen the best bid. ‘Price’ is only one of the factors they will have considered, albeit the lowest price would have been heavily weighted in the evaluation process.

At the end of the day Carillion has disappeared from the construction joint venture. The other members of the JV will have to complete the project. Transport Scotland will not have to step in in any way; the public purse will be unaffected. They have done well, from a tax-payers perspective

The contracting world is harsh, and most industries think we are insane, working on the meagre margins that we bid. We do it to ourselves I’m afraid. Construction is really rather shit.

The solution needs to be a sensible combination of the two, and a bit more nuanced

I’ve not seen any evidence that Corbyn is wanting to nationalise the construction industry. He’s said that where the public sector can provide services, they should be the default option. Construction projects will always be executed by the private sector, the only difference is the middlemen like Carillion will be cut out of the supply chain.

I got passed by a Carillion van this morning in Bristol

Was a rail services one. Quite surprised to see it on the road, I wonder if their insurance is all still paid up.

most civil engineering projects in the UK are priced to achieve 3% profit. That is high risk for low reward.

Very much so. Managed services not much different.

I agree with Binners, this is a political issue. The use or overuse of PFI’s. The outsourcing of two many services, minimising the number of suppliers and so concentrating risk. All rhis driven by the governments from the 1980’s onwards.