Emergency Question: Carillion

Part of the debate – in the Senedd at 1:46 pm on 16 January 2018.

Alert me about debates like this

Photo of Mark Drakeford Mark Drakeford Labour 1:46, 16 January 2018

Just to be clear in relation to junctions 15 and 16 of the A55, the whole business of awarding a contract had been completed before the profits warning on 10 July, but contract letters had not been sent out to the company. So, at that point, the sending out of award letters was withheld, and a further set of investigations were carried out with Carillion plc to determine if they were risks that needed to be identified. So, there was a further period of due diligence, in which formal assurances were sought and obtained from the company. Officials who were responsible for carrying out that assessment believed that the necessary assurances had been obtained. There was an equal or different risk that, had the award not been made, the company itself may have sought to have had that decision reviewed, because the ordinary processes had been properly completed and they had won the contract. So, there was a risk that they themselves would have sought to take action, giving rise to a further set of delays of the sort that Janet Finch-Saunders mentioned earlier and that, understandably, local citizens would have been keen to avoid. So, there was a balance of risk to be drawn up. It was very purposefully and thoroughly investigated. 

Turning to his point about the Llanddewi Velfrey to Penblewin section of the A40, that is a three-phase contract. The first phase is more or less completed. There will be choices to be made, which the Minister responsible will now want to weigh up. In this case as well, there are substantial subcontractors involved in the scheme, and it is possible that one of them may be in a position to become the main contractor, and the advantage of that would certainly be that it would reduce delay. But the opportunity is there, if the Cabinet Secretary prefers, to go out to tender for the next phase of that contract, to see what the market has to offer and to secure the best value for Welsh public expenditure. The downside of that is that it inevitably involves a delay. In the very short period of time since the Carillion collapse occurred, officials have been identifying options, and no doubt they will put advice to Ministers, and Ministers will then decide between them.