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Openreach, Gigaclear optimistic despite Carillion collapse

One of the UK’s major construction companies, Carillion, has been forced to enter liquidation. The move comes following unsuccessful talks with potential lenders and government to try to rescue the business, which provides services to the defence, education, health and transport sectors. Alongside its partner telent, Carillion is also a supplier to two big name firms in building out broadband.

The High Court has appointed PwC as ‘special managers’ to support the official receiver and the government is to provide the funding required to maintain existing public services contracts. The construction firm has some 43,000 employees – 20,000 in the UK alone, as well as numerous smaller companies contracted to carry out work on its behalf. It has not yet been made clear how employees might be affected, but in a statement by PwC they have been advised that they should ‘continue to attend for work and you will continue to be paid as normal.’

In October last year the joint venture was awarded a £200 million contract with Gigaclear to roll out 1Gb/s broadband to the South West England (see Gigaclear signs Carillion telent to build FTTP in SW England), and last February it reached a £1.5 billion agreement with Openreach to extend its national fibre broadband network. So, what might Carillion’s liquidation mean for these agreements? Fibre Systems contacted representatives from Openreach and Gigaclear for their views.

A statement released from Openreach said: ‘We note the reports about our work with Carillion telent. The joint venture is one of seven major partners providing similar services to Openreach across Britain and we have robust processes in place to monitor and manage all of our supplier risk.

‘We have conducted a thorough legal and financial assessment of the joint venture, and we’re confident in its ongoing viability without Openreach incurring any extra cost or liability. We’ll continue to work closely with telent to avoid disruption, but we have every confidence that there will be no impact on our national network services and plans.’

Chief executive of Gigaclear, Matthew Hare is confident that the contract will not be impacted, stating: ‘It is very sad news that Carillion has gone into compulsory liquidation. Whilst this may have a minor impact on delivery schedules, Carillion telent is a separate business holding its own funds and bank accounts. Therefore, the contract with Gigaclear to deliver the build for full fibre broadband to the South West region still stands.

‘We are committed to delivering ultrafast broadband to Devon and Somerset, and already work with alternative partners in the area should the need to relook at capacity and resource arise. We will ensure any disruption to both our potential customers and suppliers is minimised. Our priority remains to connect this area to future proofed, full fibre broadband.’

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