Train Graphic
Great Western Passengers' Forum Great Western Coffee Shop - [home] and [about]
Read about the forum [here]. Register and contribute [here] - it's free.
Random Image
Train Running @GWR Twitter Acronyms/Abbreviations Station Comparator Rail News GWR co. site Site Style 1 2 3 4 Chat on off
July 23, 2018, 06:40:30 pm *
Welcome, Guest. Please login or register.

Login with username, password and session length
Forgotten your username or password? - get a reminder
Most liked recent subjects
[185] New GWR Hitachi Trains
[153] This station looks familiar...
[56] Infrastructure problems in Thames Valley causing disruption el...
[46] Delays make you happy?
[37] Oxford Area Resignalling 2018
[32] GWR & SWR to run current timetable until May next year
News: A forum for passengers ... with input from rail professionals welcomed too
 
   Home   Help Search Login Register  
Pages: 1 ... 4 5 [6] 7
  Print  
Author Topic: Carillion - railway contractor / public services provider - financial concerns, 2017/18, now in liquidation  (Read 11190 times)
ellendune
TransWilts Member
Hero Member
******
Posts: 2904


View Profile
« Reply #75 on: January 31, 2018, 09:26:13 pm »

Capita is often spelt with an "r" inserted between the first two letters, there are numerous reasons for this.

I for one will laugh if they bust, serves them right. I would of course feel sorry for staff, suppliers and sub contractors, who faced loss or worry, but for capita as a company "just desserts"



What about those who rely on their outsourcing services for pensions they manage a lot of pension schemes? 
Logged
ellendune
TransWilts Member
Hero Member
******
Posts: 2904


View Profile
« Reply #76 on: January 31, 2018, 09:28:18 pm »

We should all remember we have been told time and time again ..........

The competitive tendering of out sourcing the out sourcing is the most efficient and cost effective way to do business ......................................



Yes you get the worst possible service for the cheapest possible price. Then you pay extra to deal with the fallout and to get the outsource contractor to put it right, but those costs are charged to a different account so the management never realise the real costs of outsourcing. 
Logged
LiskeardRich
TransWilts Member
Hero Member
******
Posts: 3050

richardwarwicker@hotmail.co.uk
View Profile
« Reply #77 on: January 31, 2018, 10:39:51 pm »

We should all remember we have been told time and time again ..........

The competitive tendering of out sourcing the out sourcing is the most efficient and cost effective way to do business ......................................



I’ve always questioned how outsourcing can be cheaper and make a profit....
A former employer outsourced cleaning for cheaper than the minimum wage they were already paying their cleaners. Then the cooks in the canteen were outsourced, again for cheaper than minimum wage. How can it be possible to make profit for cheaper than employing a minimum wage in house? The savings on cleaning products would be minimal I imagine?
Logged
johnneyw
Hero Member
*****
Posts: 501


Schrödinger's cat walks into a bar... and doesn't.


View Profile
« Reply #78 on: January 31, 2018, 10:50:17 pm »

We should all remember we have been told time and time again ..........

The competitive tendering of out sourcing the out sourcing is the most efficient and cost effective way to do business ......................................




I've never been fully convinced why a publicly owned body should not be allowed to operate on commercial principles with the shareholders being the taxpayer. This includes raising funds by government bond issues if needed with the returns going to the bond holders.
Logged

We've all heard that a million monkeys banging on a million typewriters will eventually reproduce the entire works of Shakespeare. Now, thanks to the internet, we know this is not true.
Robert Wilensky
bignosemac
TransWilts Member
Hero Member
******
Posts: 15692


Question everything.


View Profile
« Reply #79 on: February 02, 2018, 01:48:34 am »

Capita are probably okay for the short term.

The one to watch is Interserve, another diversified construction and support services conglomerate, also with many government contracts. They came very close to breaching their banking loan covenants late last year, but squeaked through with £180million in short term funding from lenders. Their banking covenants' test date compliance is now March 2018.

Looking at where investors are putting their money, or rather aren't, at the moment, I predict one or two more of these type of companies will fold this year.

Balfour Beatty, Capita, Interserve, Kier Group, Mitie, Serco... none are particularly financially healthy at the moment.
Logged

Former FGW/GWR regular passenger. No more. Despicable company.
grahame
Administrator
Hero Member
*****
Posts: 20968



View Profile WWW Email
« Reply #80 on: February 02, 2018, 07:22:21 am »

Looking at where investors are putting their money, or rather aren't, at the moment, I predict one or two more of these type of companies will fold this year.

And isn't that the effect of the natural survival of the fittest / lean and mean / jungle law system that's used.  Less efficient operations get swallowed up or collapse. They give way to, or birth to, or fertilise the ground for newer and "better" operations.   With this "natural selection" at this key point in so many systems, it's surely good practise for all involved in commissioning, using or supplying them to ask themselves "what would I of if they go belly up ..." ... and I would hope that our Government has thought that one through to deal with what's a phenomenum that's going to be a recurring element in the system they use and support.
Logged

TransWilts Rail - Linking North to West and South 9 times a day. [see here]
TaplowGreen
Hero Member
*****
Posts: 3742


View Profile
« Reply #81 on: February 02, 2018, 09:33:10 am »

We should all remember we have been told time and time again ..........

The competitive tendering of out sourcing the out sourcing is the most efficient and cost effective way to do business ......................................



I’ve always questioned how outsourcing can be cheaper and make a profit....
A former employer outsourced cleaning for cheaper than the minimum wage they were already paying their cleaners. Then the cooks in the canteen were outsourced, again for cheaper than minimum wage. How can it be possible to make profit for cheaper than employing a minimum wage in house? The savings on cleaning products would be minimal I imagine?

Because the private sector is generally far more efficient and cheaper than the public sector in a lot of areas.They are used to operating in a competitive commercial environment without the comfortable layers of fat, waste and outdated practices which the public sector allows for......just look at purchasing as one example.
Logged
didcotdean
Hero Member
*****
Posts: 880


View Profile
« Reply #82 on: February 02, 2018, 11:01:49 am »

Outsourcing companies have been getting into trouble at least in part by bidding with little or no profit margin. This looks nonsensical but they could have been doing it for a number of reasons, such as maintaining cash flow or defensively not to lose it. The public sector game became very much more difficult from 2010 onwards as cost rather than value became increasingly important and the screw has tightened once more with the government only having time for Brexit.

Carillion though in many cases never did the work but subbed it out itself.
« Last Edit: February 02, 2018, 11:52:22 am by didcotdean » Logged
broadgage
Hero Member
*****
Posts: 1939



View Profile
« Reply #83 on: February 02, 2018, 12:02:30 pm »

A previous employer of mine maintained a large number of government buildings and lost a great deal of money in so doing.
Rumour at the time suggested that they never even looked at most of the buildings but simply based their bid on an asset list and the floor area to be maintained.

A particularly ironic feature was the setting up of a "tax efficient" offshore subsidiary in order to manage the contracts, which whilst not AFAIK actually illegal, was certainly sharp practice especially in view of most of the premises being tax offices!

They were lucky not to go bust.
Logged

"When customers say that they want a seat, they dont mean they want to sit with their knees behind their ears so that 4 more can sit down. They mean that they want an extra coach so that 74 more can sit down"
"Capacity on intercity routes should be about number of vehicles, not compressing people"
ellendune
TransWilts Member
Hero Member
******
Posts: 2904


View Profile
« Reply #84 on: February 02, 2018, 06:27:41 pm »

I have read somewhere that although it was comparatively easy for companies to make savings the first time a contract is outsourced there is an unreasonable expectation that there will be further savings each time the contract is relet. 

Interestingly here are some interesting comments from Robert Peston after Carillion could easily apply to franchising...

https://www.facebook.com/pestonitv/posts/1981262582198477

Quote
What i am already hearing from the outsourcing and so-called public-service industry is that the basic problem is that the government pays too little for intrinsically risky and complicated work.
Which is a bad joke.
No one forced Carillion - or any of the other members of a bruised and battered industry - to bid for the contracts.
When George Osborne and Francis Maude put the screws on them in 2010 as part of their austerity drive, the outsourcing companies could have just walked away.
That they didn’t is another triumph of short-term thinking, the endemic disease of British industry.


He could also have added " and the endemic disease of British Governments."

 

Logged
SandTEngineer
Hero Member
*****
Posts: 2100


In a Linemans Hut in the far Southwest


View Profile
« Reply #85 on: February 22, 2018, 07:13:50 pm »

From the TELEGRAPH on 22/02/2018..... http://www.telegraph.co.uk/business/2018/02/22/amey-buys-carillion-rail-contracts-saving-700-jobs/

Quote
Amey buys Carillion rail contracts, saving 700 jobs

The jobs of more than 700 Carillion employees who were working on Network Rail contracts have been saved after Amey bought the contracts

More than 700 rail industry jobs have been saved after British company Amey swept in to buy up a wave of contracts previously owned by the collapsed outsourcer Carillion.

Amey Rail will now take on the contracts for work on projects in the East Midlands, London and the North West, safeguarding more than two thirds of the roughly 1,000 Carillion workers on Network Rail projects and potentially hundreds more involved in the supply chain.

Network Rail said Amey had bought a “significant number” of Carillion’s contracts, including work on some of its most complex projects such as the North West electrification programme and work related to Crossrail at Old Oak Common, but did not disclose financial details of the transactions.

Matthew Steele, commercial director at Network Rail, said the move ensured the delivery of several major rail projects, something which would be a relief to workers who have been worried about their future.

“We do recognise that this has been a very unsettling period for the employees of Carillion and would like to thank them for the continued commitment to the delivery of these projects,” Mr Steele said.

“We remain focused on the transfer of remaining projects and employees to new arrangements over the coming weeks and months.”

Network Rail, which is state-run, said it was continuing to work with auditor PwC on other Carillion contracts and staff to be transferred to new companies. It confirmed work was continuing on Carillion projects while new contractors were found after an agreement that PwC would pay Carillion employees’ wages until after Easter and after many of the construction company's smaller rail suppliers were paid the arrears they were owed to ensure the continued delivery of important projects.

Earlier this month, the Official Receiver overseeing Carillion’s liquidation said 6,668 jobs had been saved and 1,141 people had been made redundant as a result of the January collapse, forced upon the company by a large pension deficit and debts totalling roughly £1.5bn.
Logged

Out of this nettle, Danger, we pluck this flower, Safety.
[Henry IV, Part 1, Act 2, Scene 3]
ray951
Sr. Member
****
Posts: 213


View Profile
« Reply #86 on: February 22, 2018, 09:01:59 pm »

The former Carillon site in Oxford has been renamed 'Network Rail Project Office' so maybe Amey haven't taken over that contract.
Logged
stuving
Hero Member
*****
Posts: 3236


View Profile
« Reply #87 on: February 22, 2018, 11:26:13 pm »

The former Carillon site in Oxford has been renamed 'Network Rail Project Office' so maybe Amey haven't taken over that contract.

Maybe not - if it just means that office works on a/the Network Rail Project. Not naming who's doing the work is useful if you don't know who you are working for.
Logged
Electric train
Hero Member
*****
Posts: 2936


The future is 25,000 Volts a.c.


View Profile
« Reply #88 on: February 23, 2018, 04:50:05 pm »

The former Carillon site in Oxford has been renamed 'Network Rail Project Office' so maybe Amey haven't taken over that contract.

Maybe not - if it just means that office works on a/the Network Rail Project. Not naming who's doing the work is useful if you don't know who you are working for.

Or NR have decided to change the way the work is contracted out, NR acting in CDM terms as the Principle Designer and may be Principle Contractor.  This may only be for a stage of the project that is near completion it being more economical for NR to manage it in house
Logged

Mark Carne 26 June 2015 - "The challenges of delivering myriad improvement projects while still running a railway seven days a week were simply overwhelming".
ellendune
TransWilts Member
Hero Member
******
Posts: 2904


View Profile
« Reply #89 on: February 25, 2018, 06:43:13 am »

Interesting take on government outsourcing here from  the Guardian. Selected extracts below.

Quote

Carillion is bust, leaving job losses, underfunded pension schemes and half-finished hospitals in its wake. The east coast mainline is a shambles – again. Interserve, a company with 25,000 staff in the UK supplying the public sector in health, education and defence, is being watched closely by the government in case the crisis in the outsourcing industry gets worse. Capita, which used to be seen as a source of stability, is trying to remove doubts about its own future by raising £700m via a rights issue. Its shares have collapsed from £13 to 175p in less than three years.....


Carillion et al will, let’s hope, mark the end of stupid, unthinking outsourcing – and should certainly spell curtains for the most rotten PFI contracts that have undoubtedly proved a waste of money for the public purse. But the notion that outsourcing can be abolished altogether seems fanciful.
....

Rupert Soames, chief executive of Serco, offered an excellent summary last week that should not be dismissed just because he is an interested party. Soames has spent four years cleaning up the mess at Serco, the result of corporate hubris and scandal, and is certainly not portraying the private sector as an innocent party....

Around 2010, argues Soames, the balance of power in the outsourcing market began to turn. Government, too often naive in its buying, sought to cut expenditure and put the squeeze on a sector that had attracted new entrants chasing fat profits.

“Feeling compelled to deliver the growth they had promised, suppliers competed fiercely for a reducing pool of new business,” he says. “Prices fell, and a newly savvy government discovered it had anxious suppliers prepared to accept risks and contract terms which in normal conditions they would not have agreed to. Sophisticated buying techniques were imported from the private sector; contracts for sensitive public services such as caring for asylum seekers were awarded to the lowest bidder by online auction.”

There ought to be a better middle way. Soames has four ideas, all of which deserve a hearing. First, insist on more transparency: open-book accounting would allow the Cabinet Office or National Audit Office to see what’s really happening with major contracts. Second, write contracts with break clauses on both sides, so government can escape overgenerous arrangements and firms can get out of life-threatening deals. Third, firms should write “living wills” so that contracts can be handed back safely and without disruption. Fourth, there should be a code of conduct: governments shouldn’t transfer unmanageable risks and firms should fund pensions properly, have strong balance sheets and pay their own suppliers promptly....


Logged
Do you have something you would like to add to this thread, or would you like to raise a new question at the Coffee Shop? Please [register] (it is free) if you have not done so before, or login (at the top of this page) if you already have an account - we would love to read what you have to say!

You can find out more about how this forum works [here] - that will link you to a copy of the forum agreement that you can read before you join, and tell you very much more about how we operate. We are an independent forum, provided and run by customers of Great Western Railway, for customers of Great Western Railway and we welcome railway professionals as members too, in either a personal or official capacity. Views expressed in posts are not necessarily the views of the operators of the forum.

As well as posting messages onto existing threads, and starting new subjects, members can communicate with each other through personal messages if they wish. And once members have made a certain number of posts, they will automatically be admitted to the "frequent posters club", where subjects not-for-public-domain are discussed; anything from the occasional rant to meetups we may be having ...

 
Pages: 1 ... 4 5 [6] 7
  Print  
 
Jump to:  

Powered by MySQL Powered by PHP Powered by SMF 1.1.2 | SMF © 2006-2007, Simple Machines LLC Valid XHTML 1.0! Valid CSS!
This forum is provided by a customer of Great Western Railway (formerly First Great Western), and the views expressed are those of the individual posters concerned. Visit www.gwr.com for the official Great Western Railway website. Please contact the administrators of this site if you feel that the content provided by one of our posters contravenes our posting rules (email link). Forum hosted by Well House Consultants