Transport Scotland says Carillion’s woes won’t pose risk to Aberdeen city bypass work

Keith Brown has said that 2018 will be defining year for the north-east thanks to the AWPR. (Picture by Kenny Elrick)

Transport Scotland has insisted the completion of work on the £745million Aberdeen city bypass road is not in any danger despite turmoil at one of the project’s consortium partners.

Troubled Carillion has now drafted in accountancy giant EY to help carry out a review of the business.

Financial services firms HSBC, Morgan Stanley, Lazard and Stifel were already helping the Wolverhampton-based constructiom group in a fight for survival.
Shares in Carillion surged more than 19% yesterday as investors welcomed EY’s involvement.

They also took heart from a partnership featuring Carillion winning two key UK Government contracts for the HS2 rail line.

But the rise in the share price follows a torrid spell for the company since a profit warning last week.

Chief executive Richard Howson stepped down, with immediate effect, as the firm said it would need to bolster its balance sheet and was struggling to stay within borrowing limits.

Carilion saw nearly £600 million wiped off its market value as the City responded badly, with some market experts voicing concerns the group has no future without funds to restructure.

Yesterday, Transport Scotland confirmed the two other firms building the Aberdeen bypass road face taking on the obligations of a third partner if it should, for any reason, pull out of the consortium.

A spokesman said the construction contract at the heart of the £745million route – due to open this winter – would remain intact, no matter what.

He added: “As is usual in projects of this nature, the contract makes provision for a wide variety of circumstances, including the possibility of withdrawal of one of the partners.

“This ensures the project can be successfully delivered in all circumstances.”
EY and Carillion will focus on “cost reduction and cash collection”.

Interim chief executive Keith Cochrane said: “We are moving forward quickly with the actions outlined last week. Alongside our own efforts, EY will provide support across the business and bring an external perspective to our cost reduction and cash collection challenge.”