UK's second biggest construction company collapses

Theresa May is resisting a huge bailout of stricken contractor Carillion

The UK's second biggest major construction company, Carillion failed to secure any kind of refinancing deal with its lenders or the government to cope with its huge debts and major losses on big contracts.

Britain's government is under pressure to explain why ministers awarded construction company Carillion 1.3 billion pounds of new contracts after it was known to be in financial difficulty.

The failure of Britain's second biggest construction firm puts thousands of jobs at risk in the United Kingdom and overseas.

The company has 43,000 staff worldwide, including 20,000 in the UK.

Among dozens of contracts with industries like rail, education and the NHS, Carillion also works in numerous UK's prisons.

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Thousands of jobs are in jeopardy, and the government will now be required to provide funding for Carillion to continue its work on public sector contracts. This will involve either transferring Carillion hard FM staff to a newly contracted company or to our own internal staff agency, as an interim measure to ensure work can continue and staff can continue to be paid.

Vince Cable has rejected suggestions the company should benefit from a Government bailout to avoid major public sector projects being plunged into chaos.

An application was made to the high court for a compulsory liquidation of Carillion before the opening of business on Monday and an order has been granted to appoint the official receiver as the liquidator, said the report.

David Lidington, a minister for the Cabinet Office, which supports the government and the prime minister, said there were plans to bring some of the public services provided by the company in-house, while others would be given to other contractors.

Company chairman Philip Green described the development as a "very sad day" for the company's staff, suppliers and customers.

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As well as building QA, Carillion is responsible for maintaining 50,000 homes for the Ministry of Defence, is the second biggest supplier of maintenance services to Network Rail and is now involved in the HS2 high-speed rail line plan.

In the United Kingdom, it helps look after the train tracks and railway stations and also runs some homes where people in the armed forces live.

What government plans are in place to protect employees and pension holders in the event that Carillion goes into administration or insolvency?

Jim Kennedy, Unite's national officer for local government, said a public inquiry was now needed. In the meantime, it said it would provide the necessary funding to maintain public services.

"RMT will be demanding urgent meetings with Network Rail and the train companies today with the objective of protecting our members jobs and pensions".

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