Decision made to call in Carillion bond
Following Carillion going into liquidation, Leeds City Council have made a decision to implement a contingency measure put in place to deal with the company failing.
The council’s approval for the competitive tender for the Leeds city centre cycle Superhighway City Connect 2, (phase 1) contract was awarded to Carillion Construction Limited on 3rd October 2017. The award of this contract was subject to receiving an ‘On Demand Bond’ from a major financial institution in the event of Carillion Construction Limited going into liquidation.
Leeds City Council Chief Executive, Tom Riordan, said:
“As part of the original contract for work on the Superhighway City Connect contract we made sure that public funds were protected by making it a condition that a bond was woven into the Carillion contract in the event of the contractor becoming insolvent.
“Consequently we are in contact with the bank, HSBC, who provided the bond to confirm that Leeds City Council are calling-in the payment of the guarantee.
“We are also contacting the Official Receiver to let them know that as Carillion Construction Ltd has had a winding up order made against it, Leeds City Council are terminating the contract with them. The council is arranging to use our own staff and sub-contractors to make the site safe and do any necessary work so the highway can be reopened.”