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Debt-ridden Carillion has collapsed, putting thousands of jobs at risk.

The move came after talks between the firm, its lenders and the government failed to reach a deal. It is the UK's second biggest construction company.

Carillion ran into trouble after losing money on big contracts and running up huge debts of around £1.5bn. It employs 20,000 workers across Britain but also uses thousands of smaller companies to help provide its services.

The firm is involved in a number of current transport projects in Wales.

1. West Wales Bypass

Carillion won the contract to design and build the £57m A40 bypass.

The bypass is to run around the northern side of Llanddewi Velfrey, Pembrokeshire.

The start date for the planned project is spring 2019, with an end date listed on the Wales Government website listed as autumn 2020. The design and build contractor is named as Carillion with engineering and environmental design provided by Arup and RML.

The scheme consists of:

a 2.5km bypass from Bethel Chapel to Ffynnon Wood

2.5km improvements west of Ffynnon Wood

1.4km extra overtaking eastbound

1km extra overtaking westbound

The Welsh government said it only a very small part of the overall contract and the contract allows for termination in the event of insolvency.

2. A55 improvement

The A55 is the major route across North Wales, running from Flintshire in the east to Holyhead in the west. The Welsh Government awarded the design element of improving the stretch between junctions 15 and 16 to Carillion last year. The contract allows for termination in the event of insolvency.

The plan is to replace the roundabouts at the junctions with height-separated junctions.

This will mean side roads will go either under or over the main A55, with traffic joining the trunk road via a slip road instead of a roundabout. The aim is to allow traffic on the A55 to flow more smoothly without having to slow down at a roundabout.

The collapse of Carillion will not impact on the management of the A55 on Anglesey after it was revealed the firm had already sold its shares in the venture running the road.

Carillion was part of the consortium - UK Highways A55 - which designed, built, financed and then operated the 40km stretch of the route that lies across the island - as well as the secondary loop of the original Menai Crossing.

Carillion were previously involved in this work but sold its shares to John Laing in December 2015.

The deal was concluded in December 2015 with John Laing taking full ownership of UK Highways A55. This means it will be business as usual for the management of the road.

A Welsh Government spokesperson said: " Unlike the UK Government the Welsh Government has only a very small number of government contracts with Carillion. We do not expect Carillion’s move into liquidation to have a significant impact on our infrastructure or wider work. We will do all we can to support Carillion workers in Wales."

3. The Metro

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Carillion is the construction partner to Dutch transport giant Abellio in its bids build the next phase of the Metro in south Wales with electrification of the Valleys Lines and the running of the next Wales & Borders rail franchise from October.

Abellio's bid was submitted to the Welsh Government's transport body, Transport for Wales, along with those from MTR and KeolisAmey, before Christmas.

Transport for Wales has been asked whether the fact that Carillion is now in liquidation means that Abellio's bid could be ruled out.

They previously said [ahead of liquidation] that they couldn't comment as it was a matter for Abellio and Carillion. Abellio has also been contacted to clarify the status of their Metro bid.

Last October German-owned Arriva Trains Wales, which operates the current Wales & Borders franchise, pulled out of the bid process.

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Step in rights

Sam O’Callaghan, solicitor in the construction, energy and projects team at Capital Law, says: " By going into insolvency, Carillion’s substantial ongoing project portfolio will face significant difficulty.

"With government-led contracts (like HS2), the government may, where available, exercise its ‘step-in’ rights with Carillion’s sub-contractors – and take over Carillion’s supply chain operation. This’ll be more difficult, financially, for private contracts.

"Sub-contractors, consultants, and clients may end up losing out on money that they’re contractually entitled to. Secured creditors (like banks) will be putting their hands in the insolvency pot first.

"Every sub-contractor, consultant, or anyone involved in a contractual chain with Carillion should take immediate action – starting by reviewing their contract, or getting their lawyer to do so."

The Federation of Small Businesses (FSB) National Chairman Mike Cherry, has said it is vital that Carillion’s small business suppliers are paid what they are owed, or he believes some of those firms could themselves be put in jeopardy, which would put even more jobs at risk.



"When the dust settles on this sorry saga, there is also a wider lesson to learn about the concentration of public contracts in the hands of a small number of very big businesses," said Mr Cherry.

"Public procurement must be much more small-business friendly, in which it is easier for small firms to navigate the system and the UK Government should prioritise meeting its target of at least one third of taxpayer-funded contracts going to smaller firms."