Phone lines burned up across Canada Jan. 15 as construction stakeholders sought information on joint ventures, partnerships, consortiums and diverse projects in which Carillion Canada currently participates.
Carillion PLC went into liquidation in the U.K. after failing to reach a restructuring deal with its lenders. Carillion Canada employs 6,000 in Canada.
The firm and its subsidiaries such as Rokstad, based in Western Canada, are active in the health care and transmission construction sectors as well as construction maintenance and support services including highway maintenance.
“Everywhere I go, people said, ‘Oh my, look what happened,’ ” commented Clive Thurston, president of the Ontario General Contractors Association (OGCA), last week. He said a key issue on the minds of his members was determining the relationship between Carillion PLC and Carillion Canada.
Carillion Canada issued a statement saying the Canadian arm was an independent entity.
That was the operating position OGCA members were basing their actions on, said Thurston.
As previously reported, many project owners and firms involved with Carillion Canada had known since last July that Carillion PLC had deep debts.
“Everybody is working to mitigate this and make sure it has the least impact it possibly can,” said Thurston.
One of the largest projects involving Carillion Canada is the $1.1-billion Stanton Territorial Hospital in the Northwest Territories. Carillion Canada is part of a consortium called Boreal Health Partnership (BPH) with Hochtief and Bird Capital.
Government of the Northwest Territories (GNWT) senior communications advisor Andrew Livingstone said the government is working to determine next steps.
“Carillion is not involved in construction so the recent events will not impact the construction activity,” said Livingstone, noting the project opening remains on target for mid-2019.
“A Carillion entity specific to Stanton has committed to provide 50 per cent of the equity required by BHP. This commitment is secured by a bank letter of credit so the recent Carillion events will not affect the availability of BHP equity.”
BHP was created as a special-purpose vehicle, specifically structured to be insulated from the risks of other projects or financial stresses beyond the Stanton project, said Livingstone.
“BHP remains obligated to GNWT to perform the (operation and maintenance) obligations, whether or not their subcontractor Carillion provides such services,” he explained. “GNWT has not directly retained Carillion to do so and BHP must solve the problem if they lose their service provider subcontractor.”
Another government entity, Manitoba Power, is working with Carillion Canada subsidiary Rokstad on its Bipole III high-voltage transmission line project, with an estimated value of over $200 million. The build includes construction of 1,384 kilometres of transmission lines and two converter stations. It’s targeted for summer 2018 completion.
Manitoba Power media relations officer Bruce Owen said Rokstad has confirmed to Manitoba Hydro that Carillion Canada is separate from the U.K. parent company and the job is expected to be completed this summer as planned.
As previously reported, Infrastructure Ontario (IO) said Carillion Canada has four maintenance subcontracts structured as part of IO alternative financing and procurement team contracts. IO said it has received assurances from the project-cos the four subcontracts will be fulfilled.
On Jan. 19, Ontario’s Ministry of Transportation announced it had reached an agreement for Carillion Canada to continue to perform snow removal duties as part of eight contracts with the ministry, preserving 1,100 jobs, a statement said.
Two Alberta firms with ties to Carillion Canada, Bouchier Carillion Group and Graham Construction, revealed other strategies. The former announced Jan. 17 it had repurchased Carillion Canada’s minority stake in the company after five years, resuming business as the Bouchier Group.
Bouchier spokesperson Petrina Fudge explained, “Bouchier’s buy-back was discussed as early as July 2017 and was on-going for the remainder of the year. An agreement was reached prior to the end of 2017.”
Graham said in one published report it is planning to buy out Carillion Canada’s share in a joint venture hospital construction project in North Battleford, Sask.
The Daily Commercial News and Journal of Commerce continue to examine the fallout from the announced collapse of U.K.-based Carillion PLC.
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