There has been almost no comments in the UK about what happened to many of the hospitals that were being built by Carillion for the British government as PPP’s or Private Public Partnerships.
Carillion, the construction giant went into bankruptcy about 18 months ago after the company buckled under the weight of a huge £1.5 billion of debt.
This caused all of their projects to stop immediately as there was no longer any cash to pay the sub-contractors.
The government then stepped in and employed hundreds of legal, financial and project experts to evaluate the individual projects with the objective of getting the projects finished.
Eighteen months later, many of the projects are still closed even though they could have been opened up for normal operations months ago. The reason is that the sub-contractors, the “White Van Men”, are fighting to be paid for the work that they have performed and for lat payments due to the bankruptcy. Another reason is that the consultants and project experts are being paid by the hour and are in no hurry to wrap things up!
These experts and the government appear to be unwilling to pay for all of the costs that were originally agreed with Carillion and that were caused by the delays. In return, the sub-contractors are unwilling to sign off their work in accordance with the original contracts. No other sub-contractors are willing to take on the inspection risks because the work is hidden behind walls and ceilings!
The result is that many new and newly renovated hospitals throughout the UK are standing empty!
This whole fiasco is typical of the mess that past and future UK governments have created for themselves by outsourcing too much to the private sector under the false belief that the private sector will deliver value for money by taking on huge infrastructure projects for long periods of time. Experience with IT projects, schools and prisons have all resulted in projects where the UK public sector is left with incomplete projects at highly elevated costs.
One of the biggest reasons for the failure of these projects is the government’s objective to reduce project costs. This in turn has forced the large project companies to employ ever cheaper sub-contractors, who in turn use the cheapest possible workers. It should come to no surprise that you get what you pay for…