Carillion Collapse – What Happens Next?

When really big trees are felled they create lots of smaller branches and even more twigs. The collapse of Carillion will create opportunities across the construction and IT industries and while the dust has yet to settle; when it does these opportunities will need coordinating and knitting together. Consultancies with experience in kill or cure, rapid response and ADR should be at the forefront so that the pieces fit together as well as possible and the investments in these huge projects which are now potentially as risk can be preserved for the good of all.

The fall out commercially and contractually for the stakeholders and for the Government, in particular, is a daunting prospect. Robert Peston’s tweet last week asking whether ministers and officials were ignorant, negligent or complicit raises a whole different raft of associated but separate and worrying issues. Have these leviathan companies and the associated eye-wateringly expensive building and IT projects simply got too big? Not in our view; we believe with the right independent governance embedded right in the heart of the project management, the largest and most adventurous endeavours can be delivered on time, on budget and to specification.

Whilst many of the Carillion projects will be pure construction, others will contain technology elements. From experience, technology companies will often be reluctant to continue building where others have worked on the technological foundations. This may result in significant re-work being required by clients, the costs of which may be difficult to recover.

In such a scenario, it may be a lower cost option to have the work already completed tested and accredited initially by a new vendor before requesting a tender for completing the full works.