[Football] Carillion on the brink ?

[Leekbrookgull]

We here it on the news along with print media with 'everyone' having an input (not many solutions) but just how does a company run up huge debts let alone pension debt or have they simply undercut all other companies in the market to win the contract and this is the result ?

 

[GreersElbow]

Poor management, Carillion wouldn't have cash to pay for its projects so would borrow to pay for those projects. The chances are, market conditions went against them, it all sounds a bit like Monarch and management not adapting to the changing landscape.

 

[Pavilionaire]

If the government bails out Carillion after cancelling Virgin's train contract on the East Coast 3 years early this could spell the end for PFI. Profits for shareholders in the good times yet taxpayer takes the hit in the bad times?

As for Chris Grayling - what a c*n't!

 

[thedonkeycentrehalf]

Useful background to this in the Observer today https://www.theguardian.com/busines...isis-outsourcing-operation-debts-rescue-talks

 

[Brian Parsons]

Something that has always intrigued me is how the banks let it happen not just the once but loads of times. If we get near to an overdraft scenario they are breathing fire and brimstone down the phones at us.
Unfortunately the Government are in a no win situation, do they bail them out or let them go under and put 20,000 out of work. No tax co.ing ing but dole money going out.

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[Scappa]

I'm sure that as they are major government contractors, the tax-payer will be expected to foot the bill. As with the banking collapses, rail network etc. privatise profits and nationalise the losses seems to be the way.

A little bit of digging suggests that certain board members, past and present, have shown more creativity in ring-fencing their (£multi-million) bonuses than actually running a sustainable business

 

[Pavilionaire]

The company issues a profit warning and a week later the government gives them a new contract. Ministerial incompetence + rampant free markets is a recipe for disaster.

 

[Harry Wilson's tackle]

Liquidated.

(I always said that Fish was shit.)

 

[studio150]

Gone

 

[Herr Tubthumper]

The company issues a profit warning and a week later the government gives them a new contract. Ministerial incompetence + rampant free markets is a recipe for disaster.

As I have said, the government have their eye well off the ball with domestic issues

 

[Lower West Stander]

Grayling should go for this.

A consequence of overly aggressive pricing of contracts. Speaking as someone who vigorously opposes nationalisation, this is a classic example of the worst excesses of the private sector. CEO pisses off before it all goes tits up and leaves everyone else with the mess.


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[Dave the OAP]

I never understood the principle of PFI, I.e putting all the risk on the company to build something and only getting paid by a mortgage type settlement ...and then having opposition parties whinging that the payments to recouperate and provide a profit for doing it, are far too high.

If carillon were having to stump up the money to build these huge hospitals etc, then they could only do that by borrowing...which will then lead to a spiral of debt.

It doesn't seem rocket science that this model would never work.

 

[Pinkie Brown]

The efficiency & value for money by outsourcing to private enterprise eh?

 

[WATFORD zero]

Audit heavyweight EY was placed on standby on Friday to step in as administrator if banks and the government could not thrash out a deal to save the firm.

EY was said to be favoured by the company’s directors, possibly because Lee Watson, a partner at the audit giant, is on secondment to Carillion, acting as a director and as the contractor’s chief transformation officer

 

[Dave the OAP]

The efficiency & value for money by outsourcing to private enterprise eh?

Or the devolving of public sector works to private companies as the government hasn't the money or the will to pay for them....the government can't afford to buy pencils and books for school s at the moment . This collapse is a lot more serious that people think.

 

[Beach Hut]

PFI was a bad initiative bought in by Major aggressively adopted by Blair

 

[beorhthelm]

Grayling should go for this.

I know its popular to scream for a resignation whenever something goes wrong, but what really is the ministers position in this? if they award the large contract to someone else, it only precipitates the demise of Carillion. thats not good reason to award to Carllion alone but just highlights this isnt a problem of government making, its poor management/accountancy in the business. tenders and bids go through painfully long processes, which are dictated to bey law and civil service guidelines, so they fit the bill they get the contract. If anything, those drafting the contracts/tenders are the ones to blame as they clearly load them and load them in favour of costs above all else.

 

[Herr Tubthumper]

I know its popular to scream for a resignation whenever something goes wrong, but what really is the ministers position in this?

Due diligence

 

[beorhthelm]

Due diligence

which is carried out by the department involved in tendering, not a minister personally. if the advice given to the minister is "this company is about to go bust" they award a contract, they should go. is that what happen here?

 

[Herr Tubthumper]

which is carried out by the department involved in tendering, not a minister personally. if the advice given to the minister is "this company is about to go bust" they award a contract, they should go. is that what happen here?

The minister/government is ultimately accountable. Carillion publicly gave a profits warning, and it was no secret they were seriously struggling.....yet a further contract was awarded. This is either utter incompetence, or corrupt, or both.