Ever wondered why? Big businesses don't just go under overnight. This has been badly managed for years. Blaming Qatar for late payment doesn't cut the mustard either. If you take a big contract, you make sure you're covered if that contract goes wrong.

I suspect that, once the dust has settled, we will see that the finances have been handled in a similar manner to my teenage daughter's piggybank; lots in, even more out.

One wonders whether the RAF's PFI contractors are studying this....

Years ago at an FSTA meeting at Shabby Wood, when the subject of contractor financial stability was raised, the civil serpents dismissed it with the comment "No government PFI contractor will ever be allowed to go bust...." :rolleyes:

Today Carillion, but how looks the future for the nonsense of MFTS now?

They're not struggling to stay afloat any longer, that's the good news. The bad news is, the stern is about to slip below the waves and that'll be it.

FB

On the other hand Beags, some of us could see the problems a mile away. I was 'told' to PFI a Mission Trainer. There was a form to fill, as there always is. I wrote 'NO' in the 'overseas sales?' box, disaster was avoided, and programme delivered ahead of time, to cost and better performance. The same day, Apache rolled over on their equivalent and (presumably) said Yes to overseas sales. Not sure how many they sold. Then Tony Blair was voted in, inherited the mess, but let it ride.

Financial stability of contractors used to be a big deal. But at around the same time, a major contractor approached MoD to warn it was not going to make a profit on a major project. The project team was gathered and told to get off the company's back, they could deliver late and if it didn't work, that's ok. Senior staff approved the waiving of key elements. But there's certain things you can't just waive, as the aircraft can't fly. Westland did the work and billed the prime at the end of the job. They made an even bigger loss after that.

What Messrs T&G B did with their PFI initiative was to privatise the profit and the State own the risk - brilliant!!
We reap what we sow - taxpayers to note.
mcdhu

Re your #42 Beage. The amount being charged by Tanker must well exceed the cost of delivery so they should be OK. Does anyone know if they are in profit and what sort of dividends are being paid out to shareholders or Bonuses paid out.
I note in the case of Carillion execs bonuses were protected and shareholders received a divi even though the company were in the S#1t

What are the odds - Op LIGHTBULB? Deployment of military personnel to support Defence infrastructure and estates.

Look on the bright side, get a squaddie in to fix your lightbulb and you might end up with Sky Atlantic bodged into your accommodation!

I would be up for that - how hard can Op ILLUMINATE be? Oh...already self-trained for that. I sense a business opportunity running around darkened DIO estates.

As for Sky, add elec, gas, broadband to the...cough...menu. :ok:

Unfortunate name for a businessman
 

Philip Green.
Is he a carillionairre?

Amazed to see a government minister on the BBC reassuring Carrilion workers that those working on public programmes will still be paid and should continue to work as normal.

Meanwhile back in the real world Carrillion workers have had credit lines stopped, their procurement cards stopped, trade accounts suspended and leased assets withdrawn. I'm not sure if the minister understands what liquidation means or what happens to the assets that these workers depend on.

On the subject of 'liquid' a Carrillion worker on public contract found himself having to pay out of his own pocket for a full tank of diesel for his work van as the company payment card had been blocked this morning.

Have you got a source for that please?

Direct from a few puzzled Carrillion workers as they did indeed come to work this morning. They pointed out that without the ability to lease heavy equipment or purchase consumables they will be at work-stop very quickly. They were also aware that a lot of these companies / sub-contractors had not been paid for a while and may also go to the wall.

OK, thanks for that.

Well the cleaning staff in my Mess don’t appear to have been around today. Interesting to see if it’s a one off and things settle down with the Govt line that public service contracts will keep running or whether that’s it despite Govt assurances.

Moving from Pay-As-You-Dine to Cook-It-Yourself?

ITV's Robert Peston is quoted as saying:
I also read from the BBC:

Perhaps this will include the absurdity of MFTS?

And that's one of the ways massive corporations like this both make money and try to escape facing reality. Screwing the little guys. If it were people it'd be classed as an abusive relationship.

I lost my job in 1972 in the wake of the R_R debacle. We were not sub contractors to R-R, but a lot of people we subcontracted to were. They went bust as their bills were not paid. We lost several irreplaceable sources of highly specialised engineering and we eventually went bust as well as we could not fulfil our contracts. Watch for the ripples of this Carillion collapse as they spread through the little firms, who worked for the bigger firms, who worked for Carillion. This is going to be a bloodbath.

In an ideal world these turkeys would find themselves standing outside the building in the freezing rain because the contractor servicing parliament had just gone bust.

"Robert Peston is quoted as saying:"

You would have thought he'd learned his lesson :}


Hint.

http://www.dailymail.co.uk/video/new...-swearing.html

I always thought Peston's rant about Northern Rock had a lot to do with precipitating the financial crisis

No problem....Ok this thing is called a Hoover, you plug one end into the wall and move the other end around the carpets... :E


https://dam.which.co.uk/e163bbb9-862...5eea4f2407.jpg

For all those banging on about this being the end of PFi deals and public sector outsourcing, you need to look at Carillion's last published accounts. The PFO and public sector contracts are all fine, heathy and very profitable.
It is on the construction side that they have made huge losses, they are the UK's second largest construction company, and it is here that they have got it disastrously wrong.

The PFI and public sector deals will be easy for the liquidator to sell on.

Nice!
 

For the CEO of the second largest construction company in the UK that is hardly excessive.

For a CEO of a company which was run into the ground by himself and his cohorts, it's massively excessive!

We've seen it before. Remember RBS?

Carillion
 

That's all very well, and at the end of the day the good bits will be passed on. However the whole firm is at a standstill and will not be paying wages so one hopes that the hapless workers have a month or two's salary stashed away. I was lucky when I got thrown on the scrapheap when my employer went into liquidation. The liquidator had a few jobs which if finished would bring in some cash. I had been a chief designer, but I worked for six weeks as a contract draughtsman while I found another job.

Basic Contract Management Rule No 1:- Never award a major contract without performing due diligence on the Contractor.

This has clearly never been undertaken. The serious issues with Carillion have been known about for some time.

It is excessive if he cocks up.

Clearly somebody upcocked. "The buck stops here"

I’m not entirely convinced by that, I think it will certainly intensify the debate about public/private sector outsourcing and relations. And the Tories are not in much of a position to weather another storm right now, especially if the effects spread into the extended supply chain thus exacerbating ‘contagion’ amongst the electorate. I’m politically incoherent in terms of who I support, and although my tendency is to the right in this case I think JC has raised a valid point that needs at least considering.

As for the accounts being healthy for their public sector work, that makes no odds, you have to look at the totality of the accounts to say a company is healthy. As it is, it looks as though Carillion’s finance department had been engaged in all sorts of schemes - legal I should add - to mask the dire state of their cash flow such as rising debt levels which didn’t feature in the main debt numbers on the balance sheet and mixing financing and operating cash flows. It was all there if you did the requisite due diligence, going back a good few years. Some of it apparently due to unhappy customers not paying up after bodged jobs. But in all, a very good example of why cash is king in the business world - for all their multi-billion contracts they simply didn’t have sufficient cash to keep the lights on. And when that became apparent valuations went into free fall and it was only a matter of time.

And whilst the public sector contracts will likely be sold on, it won’t be a good deal for the public purse, as I suggested right at the start, most sensible firms will see they have us over a barrel.

IT was some of the support companies featured on the news I feel really sorry for as they have already started to let staff go as they are owed a small fortune, one company was owed £1,000,000 in unpaid work.

An interesting point was made by Vince Cable on the radio yesterday - the Govt don't have specialist contract negotiators/writers (I believe we used to once upon a time) - the French have an academy for that specialisation, properly trained people with experience in due diligence and finance.

As a country we still haven't learned the warning about 'not putting all your eggs in one basket' and continue to believe that economies of scale work, both militarily or financially - that is how you create behemoths that are 'too big to fail'.

Couple that with a desire from both major parties to move things off the treasury balance sheet - welcome the PFI fiasco - and it's no surprise we have ended up here.

In MoD this may have gone full circle. Commercial staff are encouraged to gain professional qualifications, although how they compare to industry professionals I don't know.

Setting this aside, there are two sure-fire ways to a successfully and timely contract being awarded. One, get the company to draft it. Most delays are caused by Commercial faffing around for months over terms and conditions, trying to get the company to accept unsuitable ones. It ain't a contract until MoD agrees it is, so there can never be any harm caused. Two, the technical project manager negotiates and agrees the contract, as used to be the case with anything airworthiness or repair related. Commercial don't like this as they are taught, wrongly, only they can sign a contract. Read the regs and get over it. Underpinning this, make sure the Schedule of Requirements reflects what the Service really needs and what is possible; which seldom aligns with what DEC asks for. Downside - to achieve this you need experienced, trained technical staff. Otherwise, it's straight forward.

But none of this counts for anything if you get a political over-rule, to let the contract on a company who didn't bid, who happen to be in a Defence Minister's constituency. Perhaps not a million miles from the Carillion problem.

Sometimes politics over rules sensible debate. I left a company in the defence industry when the technical director and sales chief decided not to accept my estimate of how many man years of work would be needed to design a new tank sight. I was Chief Designer and had been hired in to buck up their design department. I had already won the contract for the image intensified night sight for the SA80 rifle for them and introduced new more efficient working practices in the design area. They over ruled me and went ahead using a lower figure which I knew could not be achieved in order to undercut our oppositon. Money was lost, the parent company sold the outfit to the French (not long after I left) and all the culprits lost their jobs.

Earlier in my career I worked for a very large blue chip company in the heavy electrical business. They had a whole department whose job it was to work how long they could delay paying their sub contractors before legal action was on the cards.

Sounds like Carillion had both these things going on.

As a mere Chartered Management Accountant, our wonder what our auditing cousins were doing for the last few years

As I understand it the current CEO was brought in last year to try to turn things around after the company got into difficulties during the time under his predecessor. Simplistic jeering about "upcocking" may not be appropriate, but it does play to the crowd.

Throw in a few knob gags while you're at it and you'll get yourself an audience.

It will be an ignorant, brainless audience, but still an audience...

PDR

By that stage alarm bells should have been deafening ..