Carillion's contracts: problem projects, joint ventures and customers

analysisThe NAO's timeline records that on 10 July 2017 Carillion announced a £845 million provision for losses on three UK public sector private finance initiative (PFI) construction contracts, the Midland Metropolitan Hospital, the Royal Liverpool University Hospital and the Aberdeen Western Peripheral Route, which accounted for 27% of the provision, and on construction contracts in the Middle East, and that its chief executive resigned. On 14 July Carillion appointed restructuring consultants, government contingency planning began on 20 July, and on 11 September senior management including the finance director were asked to resign, a Chief Transformation Officer was seconded from EY and a new Chief Financial Officer took over. ¹

analysisDrawing on an FTI Consulting report for Carillion's major lenders, the NAO listed four loss-making public sector contracts with expected 2017 losses. On the Aberdeen Western Peripheral Route (£91m), a joint venture to design, build, finance and operate a 58km ring road, the lenders' advisers cited a very low bid price, unforeseen water and peat ground conditions and oil pipeline constraints. At the Midland Metropolitan Hospital (£48m) critical design elements were 17 months late, structural designs were poor and space was constrained. The Royal Liverpool University Hospital (£83m) suffered a 14-week asbestos delay, design delays, structural deficiencies requiring repair due to poor design and a lack of due diligence before construction. Losses on a HM Prison & Probation Service facilities management contract for 52 prisons in England and Wales, originally with the Ministry of Justice (£12m), were attributed to its being a 'first generation' outsourcing contract and to inaccurate tender assumptions. These causes are the lenders' advisers' assessment as reported by the NAO, which noted that the government does not necessarily agree with the size of the losses, which may have implications for future claims. Former Carillion directors told the NAO that the reasons for the losses were multiple and complex and that the list reflected only some of them. After the liquidation, according to the NAO, construction work on the Midland Metropolitan and Royal Liverpool University hospitals stopped while the PFI investors found alternative construction companies, and the Ministry of Justice established a new government company to provide facilities management services in prisons. ¹

analysisCarillion's own group business plan of January 2018 set out the position on these contracts. It forecast a £119m net cash outflow on the Midland Metropolitan Hospital, 47% complete with claims of £33m, where the risks were the completion date of June 2019 and recovery of a £10m claim against Aecom by June 2018. On the Aberdeen contract, 79% complete, it forecast a £26m net cash outflow with claims of £40m; the key risks were the completion date (May/June), liquidated damages and lane occupation changes, recovery of £25m of claim value from Transport Scotland by June 2018 and recovery of £15m from designers and insurance by December 2018. The Royal Liverpool hospital (87% complete, claims £43m) carried a forecast £24m outflow, with risks in completion including commissioning and in recovering £34m of claims from third parties, and the PF2 schools (93% complete) a £23m outflow, with a £5m claim for change and variations under negotiation with the Education & Skills Agency. The plan also stated that EY was supporting the company in establishing a risk management and assurance framework building on lessons learnt from the contract reviews. ²

analysisThe new Royal Liverpool University Hospital was a PFI project. According to the committees' report, The Hospital Company (Liverpool) Ltd and the hospital trust agreed the PFI contract for the design and construction of the hospital on 13 December 2013, and on the same date The Hospital Company (Liverpool) awarded Carillion Construction Ltd (CCL) a five-year, £235 million design and construction contract. The report names the trust as 'The Royal Broadgreen University Hospitals NHS Trust'; Carillion's 2014 annual report names the Royal Liverpool and Broadgreen University Hospitals NHS Trust and describes a £335 million project due for completion by 2017, in which Carillion would invest £15.5 million of equity, expecting around £200 million of revenue over the 30-year concession and around £100 million from non-clinical support services. Carillion's 2016 annual report lists a 50% interest in The Hospital Company (Liverpool) Limited. CCL began construction in February 2014 with phase 1 due by 31 March 2017; delays due to asbestos were reported as early as May 2015, pushing expected completion to 30 June 2017. ^{1 2 3}

analysisIn a letter of 21 February 2018 to the chairs of the Work and Pensions and Business, Energy and Industrial Strategy committees, The Hospital Company (Liverpool) set out how the structural work was divided: TPS Consult Ltd, a Carillion Group company, had overall responsibility for the structural design; the design and installation of the floor plates and integral beams was subcontracted to Heyrod Construction Ltd, which subcontracted aspects of the structural design to Freyssinet Ltd; and Freyssinet designed the beams, which Heyrod manufactured and installed. Cracks were first discovered in two beams on 24 November 2016, and exclusion zones below and above them remained until 24 January and 24 March 2017; a review commissioned by CCL identified six beams needing remedial work. Remedial costs were being borne principally by Heyrod and Freyssinet until liability was established, CCL had incurred costs and made some payments to Heyrod, and monthly payments to Carillion were reduced to cover a proportion of the remedial costs. ⁴

analysisThe Hospital Company told the committees that five of the eight defective beams could have failed under the load of a fully occupied and operational hospital, and that had the defects not been identified and remedied during construction this could have resulted 'at best, unsafe working conditions and at worst, injury and loss of life'. That is the PFI project company's assessment, given in response to evidence from Richard Howson, and liability for the defects had not been established when it wrote. Howson told the committees that Carillion 'did not just cover it up' but properly rectified the beams at a cost, that 'those beams would probably never fail in their cracked state', and that rectification added 'over £20 million of cost' to completion. The Hospital Company said that Carillion Construction Limited, as main contractor, had been the critical party in remedying the defects and progressing the project, and that since the insolvency of the Carillion group it had entered into negotiations with alternative contractors to complete the works safely in line with a revised timetable to be agreed with the Trust; the NAO recorded in June 2018 that construction work had stopped while the PFI investors found an alternative construction company. A national newspaper reported in February 2023 that the collapse had delayed the 646-bed hospital, due to open in 2017, and that the project ran hundreds of millions of pounds over budget. The retained documents record no determination of liability for the beam defects. ^{5 4 6 1}

analysisCarillion's 2016 annual report stated that a Carillion joint venture, The Hospital Company (Sandwell) Limited, was delivering the Midland Metropolitan Hospital public private partnership (PPP) project for the Sandwell and West Birmingham Hospitals NHS Trust, a hospital of around 683 beds and 13 operating theatre suites. Carillion would invest £13 million of equity, build the hospital at a capital cost of £297 million and provide hard facilities management and maintenance worth about £140 million over the 30-year concession; the report lists a 50% interest in The Hospital Company (Sandwell) Limited. Among Carillion's requests to the government between 31 December 2017 and 14 January 2018 was up to £125 million towards completing the hospital in exchange for an equity stake. ^{1 2}

analysisAccording to the letter of 27 February 2018 from the employer, Msheireb Properties, to the committee chairs, Msheireb Downtown Doha was the first project Carillion undertook in Qatar. The letter states that the joint venture of Carillion (Qatar) LLC, which Msheireb Properties described as a subsidiary of Carillion plc, and Qatar Building Company was selected after a competitive tender to construct Phase 1B of the project, 27 low- to mid-rise residential, hotel and office buildings with a gross floor area of about 160,000 m2, under a contract based on the FIDIC Red Book; work commenced on 29 December 2011 with completion originally scheduled for 25 June 2014. Msheireb Properties' letterhead describes it as a subsidiary of Qatar Foundation, and Carillion's 2016 annual report lists Carillion (Qatar) LLC as a 49% holding of the group. The committees described it as a 2011 contract with Msheireb Properties, a Qatari company, due to complete in 2014 but still unfinished at the time of their report. ^{1 2 3}

analysisThe committees heard 'claim and counter-claim' from Carillion's directors and Msheireb Properties, each of whom said the other owed them £200 million. They did not determine the true position, said they were baffled that neither Carillion's internal nor its external auditors could tell them, and found it clear that the contract was not well managed by Carillion, citing a July 2017 board 'lessons learned' pack that referred to a weak supply chain, poor planning and failure to understand the design requirements up front. Who owed whom remains disputed between the parties: the retained documents contain no arbitral award, judgment or settlement determining the amounts. ²

analysisFor Carillion's side of the dispute the committees cited the oral evidence of Richard Howson, Carillion's former chief executive (oral evidence question 482). Msheireb Properties' letter summarises that evidence as stating that Carillion was owed £180–200 million by Msheireb Properties when Howson left the business (March 2017) and that Carillion's works were due to finish in May 2017. Msheireb Properties 'entirely disputes' that it owed that sum, suggesting that the figure may refer to the value of construction work remaining to be completed plus delay claims not yet established, and says that after the extensions of time granted the completion date was September 2016, not May 2017. It also rejected as factually incorrect Carillion's evidence that 'we were not paid for 18 months', stating that the contractor, the Carillion (Qatar) LLC joint venture, was paid at regular monthly intervals from January 2012 to January 2017 on amounts assessed by the contract administrators: QAR 1,027 million for 2012–2014, QAR 819 million for 2015, QAR 1,287 million for 2016 and QAR 13 million for 2017, the 2017 figure being lower because Msheireb Properties had agreed to pay Carillion's subcontractors directly as Carillion was 'unable or unwilling' to do so. It said there were about 700 variations on the project, not the 2,500 Carillion had alleged, and rejected the evidence that its contract allowed it not to pay on time: the conditions of contract contained no such clause, and a contractor not paid on time could give notice and suspend or terminate. In a response to the committees' report, published in July 2018, Howson said the payment problems Carillion faced with Msheireb Properties had also been experienced by a number of other contractors and sub-contractors in Qatar. Both versions are party statements: Howson's evidence comes as summarised by the counterparty and in his own later letter, Carillion's directors gave an account contrary to the employer's, and neither the amounts nor the completion date was determined in the retained documents. ^{1 4 2}

analysisCarillion's January 2018 business plan forecast a £67m net cash outflow on the Msheireb contract, then 96% complete, with claims of £97m. The key risks it listed were the completion date (Q2 2018), recovery of outstanding value for preliminaries and agreement to and payment of £97m of extension of time claims, and it noted that the client held an on-demand performance bond of about £54m. The plan assumed a final settlement in August 2018 with a receipt of £39m and release of 40% of the retention (£11m), offset by payments to the supply chain. ⁵

analysisMsheireb Properties stated that Carillion owed it a similar amount. It cited good-faith overpayments of QAR 149 million in December 2016, made up of an on-account payment of QAR 50 million against a 2016 prolongation claim that its consultants had valued at zero and an early release of QAR 99 million of retention; direct payments to subcontractors whom Carillion had not paid; and liquidated damages for delay of QAR 237 million (about £47 million). It said the 'on-demand' performance bond, provided by an approved bank on behalf of the contractor, was 10% of the contract sum (about £47 million) and could be used only on events prescribed in the contract. The letter also gave the employer's history of the claims: Carillion made a claim of QAR 771 million in 2016 for extension of time and prolongation costs, which an independent consultant assessed as without merit; earlier variation claims had been paid (QAR 17 million in 2014/15 and QAR 187 million in June 2015 and May 2016); after extensions of time the completion date was September 2016 and the project was 8 months late by May 2017; Msheireb Properties had taken legal advice in March 2017 on pursuing Carillion; and it hired a new contractor in June 2017 because Carillion was unable to complete the works and was not paying its subcontractors. It said Carillion's demise 'was not attributable to monies "owed" on this Project', answering Howson's evidence, which it summarised as inferring that the project and the failure to settle its final account 'helped to sink Carillion'. Carillion's directors told the committees that it was Msheireb Properties that owed Carillion about £200 million, and Howson's July 2018 response pointed to the same payment experience among other contractors and sub-contractors in Qatar. Carillion's January 2018 business plan, by contrast, had put the on-demand performance bond held by the client at about £54m and its own extension-of-time claims at £97m. All of this is the employer's account, contrary to that of Carillion's former chief executive, and neither the counter-claim nor Carillion's claims was determined in the retained documents. ^{1 5 2 4}

analysisCarillion's 2016 annual report stated that in 2006 Aspire Defence Limited, a 50:50 joint venture between Carillion and KBR, was awarded a 35-year concession for Project Allenby Connaught, the largest infrastructure PPP project ever let by the UK Ministry of Defence, worth about £8 billion at 2006 prices and ending in 2041, and that Carillion/KBR joint ventures had since delivered about 550 new and refurbished buildings and facilities management services for them. In 2016 Carillion/KBR (50:50) joint ventures were awarded Ministry of Defence contracts supporting the Army Basing Programme across the Salisbury Plain Training Area and Aldershot, together worth over £1.1 billion: a design and construction contract for 130 new buildings and related works with an estimated value of £680 million (Carillion's share £340 million over 2016 to 2020), and facilities management under a variation to the Project Allenby Connaught contract expected to generate a further £430 million (Carillion's share about £215 million). ¹

analysisAccording to Carillion's 2014 annual report, a Carillion joint venture won in 2014 all five Next Generation Estates Contracts (NGEC) for which it bid to provide hard facilities and asset management services to the Defence Infrastructure Organisation, the National Prime Housing contract and four Regional Prime contracts, initially for five years and extendable to 10, worth up to £4.5 billion to the joint venture and up to £2.5 billion to Carillion over 10 years and covering around 85 per cent of the Ministry of Defence estate. Carillion's 2017 half-year results reported that the Defence Infrastructure Organisation had awarded a Carillion joint venture the HESTIA multi-activity services contract for the London and South East region, with potential revenues above £200m over an initial five-year period, and that after the half year two further HESTIA contracts, for the Northern and the Scotland and Northern Ireland regions, had been awarded to a Carillion joint venture, with potential revenues above £300m over the initial five years. Those two awards appear to correspond to the two Ministry of Defence facilities management contracts that the NAO lists as won by Carillion's joint venture with Aramark (103 sites in Scotland and Northern Ireland and 130 sites in the north of England, awarded 3 May and 28 June and announced 18 July), and Carillion's January 2018 business plan names Aramark as its HESTIA partner. The match rests on regions, timing and partner; no retained document states expressly that the NAO's two contracts are the HESTIA awards, and the values differ: the NAO gives a total contract value of £182 million, whereas Carillion described a potential of more than £300m over the initial five years. ^{2 3 4 5}

analysisThe January 2018 business plan described Carillion's Central Government segment (2018 revenue £745m) as providing support services to the MoD and other central government departments, with key customers the MoD and the Defence Infrastructure Organisation, the MoJ and the Home Office, and key joint ventures Aspire (with KBR), NGEC (with Amey) and Hestia (with Aramark). It listed the key contracts with their end years as Aspire ('41), NGEC ('19), Northwood ('31), NOMS Prisons ('22) and Hestia ('23), and its provision review added a further £11m for NOMS, which it described as the National Offender Management Service prisons services contract with the MoJ. ⁵

analysisCarillion's 2014 annual report described it as the largest supplier of infrastructure services to Network Rail, which in 2014 awarded Carillion contracts worth some £600 million plus framework agreements with an estimated revenue value to Carillion of up to £500 million. Its 2016 annual report described Carillion as one of the leading suppliers of rail infrastructure services in the UK, working with Network Rail since 1999 under framework agreements in England, Scotland and Wales, with rail revenue above £350 million, and as the only supplier consistently among Network Rail's top two suppliers in recent years. The 2016 report also lists Carillion Powerlines Limited as a 50% holding. The NAO names 'Powerlines Ltd' as Carillion's joint venture partner on three Network Rail electrification variations announced after the July 2017 profit warning (London–Corby and Glasgow–Edinburgh, £365 million), but it does not name the joint venture company, and the partner it names is a different name from the company Carillion listed; these two records therefore do not establish that the variations were held by Carillion Powerlines Limited. ^{1 2 3}

analysisCarillion's 2014 annual report stated that it was one of five contractors selected by the Highways Agency to deliver contracts worth between £100 million and £450 million under the Agency's £5 billion Collaborative Delivery Framework, and that it achieved financial close on the Sunderland Regeneration Programme, potentially worth up to £800 million to Carillion over 20 years. By 2016 it reported several major framework agreements, notably for Network Rail, Highways England and Scape, for whom it was the sole provider of facilities management services for local authorities, and with UK central government under its Facilities Management Contracting Model. Framework values were not included in its order book, but at the year end it had visibility of at least some £1.5 billion of revenue from these frameworks over the next five years. ^{1 2}

analysisIn its half-year results announcement of 29 September 2017, Carillion stated that since its trading update of 10 July a Carillion joint venture had been awarded two packages for the first phase of HS2 between London and Birmingham, worth about £1.4bn in total, of which Carillion had a one-third share. The first, 16-month stage covered design, programme and target cost, and the construction stage was expected to take four to five years; the construction value was not yet in the order book because proceeding to stage two depended on the outcome of stage one. ¹

analysisCarillion's 2014 annual report stated that Carillion was well advanced with Phase 1 of the £400 million redevelopment of Battersea Power Station, begun in the second half of 2013 and scheduled for completion in 2016, on a site owned by a Malaysian consortium of S P Setia, Sime Darby Property and Employees' Provident Fund, with the development managed by the Battersea Power Station Development Company. ²

analysisThe committees' report records that in 2014 Carillion, already the second biggest construction firm in the UK, attempted to merge with the only larger firm, Balfour Beatty; the move was rejected after the Balfour Beatty board dismissed Carillion's claims that the merger would generate cost savings of £175 million a year. ³

analysisCarillion's 2014 annual report stated that in 2014 it won a £200 million, five-year contract (extendable to seven years) to provide total facilities management to some 50 per cent of the public sector prisons operated by the Ministry of Justice and a £200 million, five-year facilities management contract with the Nottingham University Hospitals NHS Trust, together with support services contracts for private sector customers including the Royal Bank of Scotland, Arqiva, Heathrow Airport Limited and Canadian Natural Resources Limited, worth over £400 million over five years, and selection for Network Rail framework contracts it estimated at up to £500 million. ¹

analysisCarillion's 2016 annual report listed among that year's UK successes two Northern Ireland Housing Executive contracts worth up to £366 million to maintain 22,000 houses over 10 years, a £64 million facilities management contract at London Overground stations for Arriva Trains and a £42 million contract for the Cabinet Office, together with re-bid wins including a £240 million four-and-a-half-year extension with Petroleum Development Oman, a five-year, £90 million extension with Centrica that extended an existing 10-year partnership and a new contract with Nationwide. Carillion had provided facilities management for Nationwide Building Society's property estate since 2008; on the 2016 re-bid it was awarded a new seven-year contract from 1 October 2016, extendable by three years to 10, expected to generate about £350 million of revenue. ²

analysisTelecoms work ran through Carillion telent, a 60:40 joint venture that the 2016 annual report described as Openreach's main delivery partner for maintaining and extending its telephone and data network. Early in 2017 Carillion telent signed a three-year extension (extendable to five years) of its framework agreement, expected to generate up to £900 million of revenue over three years (Carillion's share over £500 million) and potentially up to £1.5 billion over five years (Carillion's share up to £900 million); the 2017 half-year results stated that Carillion had a 60 per cent interest in the joint venture. The January 2018 business plan put 2018 revenue of the Corporate & Regions segment at £688m, listed its key customers as BT Openreach, Gigaclear, Tameside, Nationwide, Centrica and Heathrow, with Carillion telent as its key joint venture, and attributed part of the expected 2017–18 growth to Carillion telent (the Gigaclear win). ^{2 3 4}

analysisCarillion's 2016 annual report stated that its business in Oman, Carillion Alawi, had provided integrated facilities management at 12 locations for Petroleum Development Oman (PDO) since 2013 and in 2016 signed a 4.5-year extension expected to generate some £240 million of revenue for Carillion; it described PDO as owned by the Government of Oman (60 per cent), Royal Dutch Shell (34 per cent), Total (4 per cent) and Partex (2 per cent). On 30 June 2017, according to the 2017 half-year results, the group disposed of 50% of its economic interest in Carillion Alawi LLC to its partner in the business. Before the disposal the group owned 49% of the business (the partner 51%) but had a 100 per cent economic interest and controlled the board and day-to-day operations, and so fully consolidated it; afterwards the two shared economic interests and control equally, and Carillion Alawi was deconsolidated and equity accounted as a 50% joint venture. The cash consideration was £12.8m (described in the narrative as £13m), with deferred consideration of up to £29m depending on performance; the loss on disposal was £0.8m after a fair value of £31.9m was attributed to the retained interest. In 2016 Carillion Alawi contributed £282m of revenue, a loss before tax of £(4)m and gross assets of £323m. ^{1 2}

analysisIn the United Arab Emirates Carillion worked through Al Futtaim Carillion, which its 2014 annual report lists as a 49% joint venture. That year the joint venture was nearing completion of the £112 million Al Jalila Speciality Children's Hospital for the Dubai Health Authority and won contracts for two luxury hotels worth some £300 million and a £75 million contract for Phase 1 of the Dubai World Trade Centre development, while in Saudi Arabia Carillion won a £70 million contract for the Aldara Hospital and Medical Centre in Riyadh. The 2014 report stated that Carillion would be the first company to benefit from UK Export Finance's new Direct Lending Facility, which it used to secure that £75 million Dubai World Trade Centre contract, and that it had already secured four contracts in the Middle East and North Africa with the support of UKEF's Standard Buyer Credit Facility. Its 2016 annual report said that in the Middle East it focused primarily on winning contracts with UKEF support, which helped margins, payment times and cash flow, and that on 7 December 2016 it announced the closure of its Caribbean construction operations, having gradually withdrawn from general construction in Canada; its 2017 half-year results mentioned a fee for putting UKEF finance in place for Phase 3 of the One Central development for the Dubai World Trade Centre. ^{3 1 2}

analysisThe January 2018 business plan listed as key MENA contracts, with their end dates in its abbreviated form, Msheireb (mid-18), Al Dara (June-18), PDO (Dec-21) and hospitals in Oman at Salalah (Nov-17 to Oct-21) and Khasab (Nov-17 to July-21), and expected MENA revenue to fall in 2018 mainly because of the deconsolidation of Carillion Alawi and construction exits in Qatar and Saudi Arabia. ⁴

analysisCarillion's 2014 annual report stated that on 24 December 2014 the group completed the acquisition of a 60 per cent equity shareholding in Rokstad Power Corporation, a Canadian powerlines and transmission business operating mainly in British Columbia and Alberta, for total cash consideration of around £31 million dependent on performance and payable in instalments to July 2017 (£11.1 million on completion), and that Carillion had committed to acquire the remaining 40 per cent after five years at 4.5 times Rokstad's 2019 EBITDA, capped at £42 million. Carillion's stock exchange announcement of the same date described the acquisition as a 60 per cent interest in the trade and assets of Rokstad Power Corporation, on terms announced on 1 December 2014. According to the 2016 annual report, Rokstad won Canadian power transmission contracts worth up to £200 million in 2016, notably a £120 million contract for Manitoba Hydro in December 2016 for the next phase of its Bipole III transmission line (scheduled for completion in 2018) and a £62 million contract for Emera. ^{1 2 3}

analysisThe same report stated that the group had a 49 per cent equity shareholding in the Bouchier Group, a Canadian business consolidated as a subsidiary, and listed Bouchier Contracting Ltd. among its 49% holdings. In 2016 the Bouchier Group won oil-sector contracts worth around £115 million, notably a three-year £63 million contract for Suncor Energy and a £26 million contract for Canadian Natural Resources Limited, and in January 2017 Carillion acquired some of The Compass Group's facilities management business in Canada. ³

analysisCarillion's 2014 annual report stated that during 2014 a Carillion joint venture achieved financial close on the Aberdeen Western Peripheral Route, in which it expected to invest some £20 million of equity, and a Carillion joint venture was selected as preferred bidder for the Midlands Priority Schools Programme (equity of up to £5 million); Carillion was shortlisted for the Midland Metropolitan Hospital, in which it could invest up to £40 million. At 31 December 2014 it had 17 PPP projects with £42 million of equity invested and £112 million of further planned investment, valued by the directors at £48 million at a nine per cent discount rate (2013: £68 million); in 2014 it sold equity investments in four projects for about £37 million, generating a pre-tax profit of £13.9 million. Its 2016 annual report stated that it had financially closed 66 PPP projects and that 2016 PPP revenue was £313.0m (2015: £192.8m), of which 81% was in the UK and 19% in Canada. By 30 June 2017 the portfolio comprised 15 financially closed PPP projects with £27m of equity invested and commitments to invest a further £52m, valued by the directors at about £46m at a nine per cent discount rate and £65m at seven per cent. Only one equity investment was sold in the first half of 2017, for £2m (first half of 2016: £48m), and the PPP pipeline fell after a strategic decision no longer to bid for PPP construction. ^{1 2 3}

analysisCarillion's related-party notes show its sales to joint ventures. In 2014 group sales to joint ventures were £277.0m (2013: £486.2m), of which £248.6m went to PPP joint ventures, including Healthcare Infrastructure Partners (NOH) Partnership (Canada) £50.3m, The Hospital Company (Liverpool) Ltd £34.4m and The Hospital Company (Southmead) Ltd £26.3m; sales to CarillionAmey Ltd were £11.3m, and the group's payable balance to Al Futtaim Carillion LLC (UAE) was £24.9m. In 2016 sales to PPP joint ventures were £306.0m (2015: £156.4m), including The Hospital Company (Liverpool) Ltd £108.6m, The Hospital Company (Sandwell) Ltd £91.0m, 'PBSP Midlands Limited' £75.2m and Inspiredspaces Bundle 5 (Ireland) Ltd £28.0m; total sales to all joint ventures were £316.7m, with receivables of £59.9m and payables of £(112.4)m, including £(70.8)m to Al Futtaim Carillion LLC (UAE) (2015: £(56.5)m) and £(16.8)m to CarillionAmey Ltd. The 'PBSP Midlands Limited' of the 2016 note is most likely PSBP Midlands Limited (09598377), which the same report's list of undertakings shows as a 42.5% holding: no company spelt 'PBSP Midlands' appears in that list, and the 2014 report refers to a Carillion joint venture selected for the Midlands Priority Schools Programme. The identification rests on spelling and context within Carillion's own reports, as the related-party note gives no company number. ^{1 2}

analysisCarillion's January 2018 business plan assumed that the disposals of its UK Healthcare activities (the subject of an already announced transaction with Serco), Rokstad, Bouchier, Northern Ireland and Utilities would complete by 30 June 2018. Its disposals table showed assumed proceeds of £18m for Rokstad (Q2 2018), £8m for Bouchier (Q1 2018), £46m for Salus (Q2 2018), £13m for Northern Ireland (Q1 2018) and £1m for Utilities (Q1 2018), £86m in total. ⁴

analysisCarillion's 2014 annual report reported two fatal accidents on its projects that year, an employee in Oman who fell about three metres from an unfixed panel and a sub-contractor's employee in Qatar struck by a vehicle while crossing a highway during maintenance work, and a collision on the M4 motorway in England in which three Carillion employees died and a fourth was seriously injured. It stated that there were no prosecutions by the relevant UK enforcement authorities in 2014. ¹