Carillion

Carillion plc

Company type	Public limited company
Industry	Construction, facilities management
Founded	July 1999 (1999-07)
Defunct	January 2018 (2018-01)
Fate	Entered compulsory liquidation
Headquarters	Wolverhampton , United Kingdom
Area served	United Kingdom, Canada, Ireland
Key people	Sir Neville Simms (founding executive chairman), John McDonough (CEO from 2001), Richard Howson (CEO until 2017), Keith Cochrane (interim CEO 2017), Andrew Davies (CEO from 2018)
Products	Construction contracting, facilities management, rail maintenance, energy efficiency services
Number of employees	43,000 (2016)

Carillion plc was a UK-based multinational enterprise specializing in construction and facilities management, with its headquarters located in Wolverhampton, United Kingdom, until it was placed into liquidation in January 2018.

The company was formed in July 1999 following a demerger from Tarmac. Through strategic acquisitions, it grew to become the second-largest construction company in the United Kingdom and was publicly traded on the London Stock Exchange. By 2016, Carillion had a workforce of approximately 43,000 employees, including 18,257 based in the UK. Financial instability surfaced in 2015, and after facing significant challenges in 2017, Carillion entered compulsory liquidation on 15 January 2018, carrying liabilities close to £7 billion.

This insolvency caused delays and halts in projects both within the UK and internationally. Among these were suspended public-private partnership initiatives in Ireland and Canadian branches that sought bankruptcy protection. The collapse led to more than 3,000 job losses at Carillion itself and inflicted financial damage on clients, joint ventures, creditors, and nearly 30,000 suppliers—some of which also became insolvent. Moreover, around 27,000 pensioners experienced losses, with potential costs to taxpayers estimated at up to £180 million. The failure triggered parliamentary investigations into the actions of Carillion’s board members, auditors (KPMG), regulatory bodies like the Financial Reporting Council and The Pensions Regulator, as well as scrutiny of the UK Government’s outsourcing policies involving private finance initiative (PFI) projects. In October 2018, the government declared it would no longer approve new PFI contracts. The incident also led to proposed legislative changes aimed at reforming payment systems within the industry and government procurement procedures to ensure improved payment practices and suggested modifications regarding directors’ share-based remuneration.

A Parliamentary inquiry conducted in May 2018 by the Business and Work and Pensions Select Committees characterized Carillion’s downfall as "a story of recklessness, hubris and greed," condemning its cash-focused business approach and accusing directors of providing misleading financial information. The committees recommended regulatory overhauls and even considered breaking up the Big Four accounting firms. Additionally, a July 2018 report by the Public Administration and Constitutional Affairs Select Committee attributed public service deterioration linked to contractors such as Carillion to government outsourcing policies that prioritized lowest bids.

Foundation

Carillion originated in July 1999 as a result of a demerger from Tarmac, a company founded in 1903. While Tarmac retained its primary heavy building materials operations, Carillion encompassed what had been Tarmac Construction contracting alongside Tarmac Professional Services divisions. At its inception, Sir Neville Simms was appointed executive chairman; he relinquished executive responsibilities in January 2001 but continued as non-executive chairman until May 2005 when Philip Rogerson took over.

The brand name 'Carillion' was inspired by 'carillon'—a set of bells—to create a unique identity distinct from its construction roots. This branding concept was developed by London-based consultancy Sampson Tyrell (later Enterprise IG, part of WPP).

Acquisitions

Following the appointment of CEO John McDonough in January 2001, Carillion broadened its operations into the facilities management arena.

In September 2001, Carillion completed the purchase of the remaining 51% share in GT Rail Maintenance, resulting in the creation of Carillion Rail.

The company expanded further by acquiring Citex Management Services for £11.5 million in August 2002 and acquiring Planned Maintenance Group for approximately £40 million in March 2005. Additional growth came through the acquisition of UK support services firms: Mowlem for around £350 million in February 2006,
† Directors marked with a cross gave evidence to the Public Accounts Committee on 27 February 2018.)

Problematic contracts and legal actions

In November 2013, Carillion was penalised £180,000 plus costs for health and safety violations after a motorcyclist suffered paralysis on England’s A12. The Health and Safety Executive faulted the company for failing to alert drivers about a road closure.

Carillion’s subsidiary Clinicenta lost its contract at Lister Hospital in Stevenage in 2013 after the Care Quality Commission deemed the unit substandard.

In January 2016, Canadian authorities fined Carillion $900,000 for neglecting snow clearance on Queen Elizabeth Way following winter storms. Later that year in October, its Canadian division incurred an $80,000 fine plus surcharge from Ontario’s government due to improper waste disposal.

Nottingham University Hospitals NHS Trust announced plans in November 2016 to terminate a £200 million estates and facilities contract awarded in April 2014 after staff shortages forced nursing personnel to undertake cleaning duties.

In March 2022 investigations revealed that defective drainage work carried out by Carillion near a Scottish railway line during 2011–12 significantly contributed to the fatal Stonehaven derailment in August 2020.

Major projects

Carillion was involved in a wide array of significant projects, including:

• Construction of new spaces for the Royal Opera House (finished in 2000)
• Development of the Tate Modern art gallery (completed 2000)
• Building Darent Valley Hospital located in Kent (completed 2000)
• Creation of the Star City entertainment complex in Birmingham (completed 2000)
• Erection of the Grand Mosque in Oman (completed 2001)
• Construction work at Harplands Hospital in Stoke-on-Trent (finished 2001)
• Implementation of the Copenhagen Metro system (completed 2002)
• Development of the Great Western Hospital in Swindon (completed 2002)
• Expansion of the de Havilland campus for the University of Hertfordshire (finished 2003)
• Completion of the M6 Toll motorway (finished 2003)
• Construction of the Government Communications Headquarters (GCHQ), known as The Doughnut (completed 2003)
• Phase 1 development of the Nottingham Express Transit tram system (completed 2004)
• Building the Marina Towers in Dubai’s Marina district, Phase I (completed 2004)
• Completion of the Sheppey Crossing bridge (finished 2006)
• New facilities constructed for the John Radcliffe Hospital (completed 2006)
• Development of Beetham Tower Manchester (finished 2006)
• Construction of the Royal Ottawa Hospital mental health centre (completed 2006)
• Delivery of the high-speed rail line known as High Speed 1 (completed 2007)
• The Riverside Building at University Hospital Lewisham was completed in 2007
• Building of Brampton Civic Hospital in Canada, finished in 2007
• Completion of the Great Northern Tower in Manchester (finished 2007)
• Development of the shopping centre and InterContinental Hotel within Dubai Festival City (completed 2008)
• Construction of Aylesbury Vale Parkway railway station (finished 2008)
• New additions to the Queen Alexandra Hospital in Portsmouth (completed 2009)
• Completion of the Yas Hotel Abu Dhabi in Abu Dhabi (finished 2009)
• Establishment of New York University Abu Dhabi campus (completed 2010)
• Construction work on Sault Area Hospital concluded in 2010
• Redevelopment efforts at Northwood Headquarters completed in 2010
• Completion of the Royal Opera House Muscat project in 2011
• Delivery of the London-based Rolls Building completed in 2011
• Construction of London Heathrow Terminal 5C finalized in 2011
• Development of the media centre for the London Olympics held in 2011
• Completion of the Ontario Centre of Forensic Sciences facility in Toronto by 2012
• Construction of the distinctive Al Bahr Towers located in Abu Dhabi, finished in 2012
• Completion of Oman’s legislative building, known as Majlis Oman, in 2013
• The new public library building, Library of Birmingham, was completed in 2013
• Development within Cairo’s urban area, including Cairo Festival City, finished by 2013
• Construction for additional facilities at Bristol’s Southmead Hospital, completed in 2014
• Reconstruction work on Toronto’s historic Union Station, finished by 2014
• Redevelopment projects at Aldershot and Salisbury Plain military garrisons, known as Project Allenby Connaught, completed by 2014
• Building work for Oakville’s new hospital, Oakville-Trafalgar Memorial Hospital, concluded in Canada by 2015
• Completion of Dubai’s specialized pediatric hospital, Al Jalila Children's Specialty Hospital, achieved by 2016
• Phase one construction at Oman’s Convention and Exhibition Centre finalized in 2016
• Expansion project for Liverpool FC’s stadium, Anfield, completed during 2016
• Development of One Chamberlain Square located within Birmingham city centre, finished by 2017
• New office facilities for HM Passport Office established in Durham, completed in 2017
• Redevelopment Phase 1 at London's Battersea Power Station wrapped up by 2017
• Phase 1B completion for Msheireb Downtown Doha project in Qatar during 2017
• Redevelopment work on Sunderland’s former brewery site scheduled to finish mid-2018; contract later assumed by Tolent Construction and then Wates Group
• The Aberdeen Western Peripheral Route was finalized by February 2019
• New infrastructure for Royal Liverpool University Hospital completed October 2022
• Midland Metropolitan University Hospital construction concluded October 2024
• High Speed 2 lots C2 and C3 joint venture tasks were taken over following Carillion's liquidation by BAM Nuttall and Ferrovial
• The Angel Gardens residential project in Manchester transferred to Caddick Construction after Carillion's collapse and reached completion November 2020

Awards

In 2008, the company secured the top position among large and medium-sized enterprises with significant environmental footprints in The Sunday Times Best Green Companies Awards. A decade later, in 2017, it was honored with the Queen's Award for Enterprise specifically recognizing achievements in Sustainable Development.

See also

• ISG Ltd (its 2024 failure mirrored that of Carillion)
• UK insolvency law
• UK labour law

External links

• Investors Class Action
• Official Carillion plc website, now redirects to PWC
• Annual Report 2016
• Yahoo Finance company profile