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January 16, 2018

HS2 work will continue despite Carillion collapse, says government official

Work on the UK's high-speed network HS2 will continue despite the collapse of one of its main contractors, Carillion, a government spokesperson has said.

Work on the UK’s high-speed network HS2 will continue despite the collapse of one of its main contractors, Carillion, a government spokesperson has said.

Carillion filed for liquidation after it failed to reach a consensus with its lenders and the government to bail out the company, reported media sources.

The company employs more than 43,000 people, including 20,000 staff based in the UK.

It was noted to be struggling with a debt of more than £1.5bn, including a £587m pension deficit.

"We have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision."

Commenting on the collapse, Carillion chairman Philip Green was quoted by media sources as saying: “In recent days, we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.”

The company was one of the firms to successfully secure the HS2 contract, along with its joint venture (JV) partners Kier and Eiffage.

Kier and Eiffage will now be responsible for delivering the contract without input from Carillion following the latest development.

A spokesperson said that additional due diligence had been carried out before awarding the contract to the JV and the UK Government does not currently intend to review the due diligence process, reported cityam.com.

In addition to the £55.7bn HS2 project, Carillion has been employed as a contractor on nearly 450 projects, including the construction of hospitals, schools and defence sites.

The company is also one of the main contractors for Network Rail, which operates railway infrastructure across the UK.

HS2 is a planned high-speed project in the UK, which is set to run from London to Birmingham, as well as to Manchester and Leeds.

The development will be built in multiple phases and phase 1 of the project is expected to begin operations from 2026.

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