Leeds City Council has revealed that a contractor which has appointed former Carillion staff could complete work on the Cycling Superhighway after the construction giant’s collapse.
Carillion, which went into liquidation, was working on The City Centre Cycle Superhighway part of the City Connect 2 scheme until January, after which construction at six locations in Leeds stalled.
A council spokeswoman said the authority had one construction contract with the company on site, which was to the value of around £4m.
She said that to ensure the minimum of disruption to the scheme and all parties involved, the council had liaised with the government appointed liquidator and “mutually resolved” to terminate the contract, which happened on January 23.
Before the contract was awarded to Carillion last year, the council undertook “a risk-based due diligence exercise aimed at mitigating potential financial risk to the authority should an insolvency event occur,” the spokeswoman said.
She said it resolved with the council being offered a financial bond to secure its position should the constructor enter insolvency.
Read more: Council demands ‘bond’ back for £4million Leeds cycle superhighway contract after Carillion collapse.
The funds from the bond have now been called in, and will be used to cover the costs of procuring a contractor to deliver the works.
To date, the works undertaken have been carried out across six sites, each since assessed and confirmed as safe.
However, to “ensure continuity in the interim”, the council has directly appointed the traffic management contractor which was working for Carillion.
“This will ensure that safety around the work areas is not compromised prior to construction resuming,” she said.
The spokeswoman added: “The council is currently in discussions with a contractor which has appointed a number of former Carillion staff about the possibility of them completing the project.
“This solution will ensure the quickest return to site and subsequently offer the best value for money, as well as providing consistency to the project and ensuring the impact of Carillion’s liquidation on the local workforce is reduced.”