advertisement


Carillion

Modern complex tendering is an invention of procurement organisations more interested in generating jobs in procurement and tendering. It has little to do with saving money, it is a hook to hang ever expanding departments on both sides of the table with. They are often senior people as well, highly recompensed as they are often rewarded based on savings achieved.

I see both public and private sector tendering and neither are well managed IMO. They are needlessly complex and drawn out but my main complaint is the lack of feedback post award and lack of rigor making sure the terms are met.
 
Pretty much every political thread leads me to the same answer... that we desperately need Corbyn in power. Re-nationalise everything the tories privatised, preferably without compensation, set up a national bank of reconstruction, reverse pretty much every law passed since 1979 (allowing the unions to be powerful again, legal aid to return, raves to go ahead etc etc, any council houses not sold to no longer be under "right to buy" etc).
Take the power from the powerful and the money from the wealthy! If there is an exodus of billionaires and big companies that's fine. They are parasites anyway and nature abhors a vacuum so others of better morals can soon replace them (the better morals bit will of course need enforcing).
The very idea that 1% of the people could "own" 50% of the wealth is anathema and must be reversed as should the whole "system" that allows this to happen. Talkin 'bout a revolution :) This country needs running for the good of the many, not the personal gain of the few.
I agree...but that means you need to be ok with a hard brexit... and I am not happy with that particularly. He has lied to you all in the election campaign saying we should remain, but he is a euro-sceptic and now either saying nothing or talking about leaving the eu with a deal or no deal.

Most fishies are remainers and Labour supporters I think. This means the next election is a bit of a washout for you all. Never mind.
 
Until I retired I was a senior buyer for a major construction company dealing with multi million pound contracts. Main contractor tendering is cut throat and in broad terms the risk passed onto sub-contractors. Main contractors are management companies with specialist employees such as Project Managers- Surveyors-Planners-Engineers-Buyers etc.Everybody screws every else is the game these specialists are involved with.

Retention monies are held and you are also invited free of charge to have your legitimate payment delayed.

A tender aside from Preliminaries is based upon a set of rates which the buyer will then screw you down for to achieve additional profit for the Main Contractor. Some major Groundwork contracts are decided by an influential Irish mafia. It used to be the case that the Ready mixed concrete suppliers fixed the rates among themselves.I could retell stories of Brickies trying to take over sites by damaging brickwork and spirit levels etc.

The customer gets a cheap job(sometimes) but they have little understanding ( if any) of construction practise.

Mention has been made of directly employed labour, which will never be done because of the specialism involved. M&E for example usually nominated on contracts but you can bet that they are personally known by the Main contractors buyers.

A vast subject but not of interest to church goers---the masons however..........another story!
 
I've only worked in the UK and Thailand out of those - the UK as part of the EU.

Here is what you experience in Thailand. You cannot get staff or workers because of stupid immigration laws and an ongoing shortage of a skilled domestic work force. The staff you can find have no need to excel at their job or to put in that little extra for your client or business.

You cannot get plumbers, builders, electricians or anyone to fix anything because the few that are "home grown" are inundated with work and can charge whatever they like, just to turn up whenever they want.The workmanship is shoddy due to a lack of competition.

Imported goods cost twice what they should do because of ridiculous duties imposed as part of being an independent trading nation and locally manufactured items are hopelessly unreliable. Finally, health and safety is non existent, workers rites are totally non existent, pensions don't exist for the majority and healthcare costs an absolute fortune whilst not being provided by the state.

Inequality is even greater than that seen in the UK currently with the top few percent of the population hoarding most of the wealth whilst many have no home and beg for food or a day's work.

Welcome to Tory led, post Brexit Britain Rich I'm just experiencing it a decade or so earlier....

In any society there will always be waste and corruption. The question is whether the waste in the public sector costs the taxpayer more than the corruption and tax dodging in the private sector? Answer that with facts to back up the assertion and I might take the position more seriously.

Despite the Thai rail system being run by the state, Wiki gives the following.


The SRT has long been popularly perceived by the public as inefficient and resistant to change. Trains are usually late, and most of its equipment is old and poorly maintained. The worst financially performing state enterprise, the SRT consistently operates at a loss despite being endowed with large amounts of property and receiving large government budgets. It reported a preliminary loss of 7.58 billion baht in 2010.[5] Recurring government attempts at restructuring and/or privatization throughout the 2000s have always been strongly opposed by the union and have not made any progress.[6][7]

SRT's failings are reflected in passenger numbers, which have dropped from 88 million in 1994 to 44 million in 2014.[1]


So is state ownership really an indication of improvement ?
 
In all countries? No. In our closest neighbours and similar social and economic models? Yes most likely.

We subsidise our rail network by about £3bn per annum AFAIK. That's a loss. Profits go to the shareholders and managements of the franchised partners who ship a lot of that overseas and avoid tax.

7.5 billion baht represents approximately £175 million so something close to just 20% of the losses being incurred here from what I can see.
 
I'm sure you're right about that being the argument, but Carillion's pension fund was underfunded by some £600m, according to media reports, which the public finances are now going to have to pick up anyway.

As Arkless says, the cost of funding that pension would have to be in the contractor's bid price anyway, so we still pay. In this case, twice.
No, not the public finances but the pension protection fund:
https://www.economist.com/news/brit...st-their-benefits-protection-fund-viable-long
 
There will be many business' that go bust. Ironically many of whom will do so because HMRC will demand their pound of flesh just when the cash flow is at it's weakest. They will then load on penalties for late payment making the situation worse. I hope the government instructs HMRC to be reasonable where a company can show they were shafted by Carillion. I won't hold my breath though.
 
It is with great pleasure that today I would like to announce a new PPI initiative and ask for tenders to replace the functions of the Conservative Party with an outsourced private supplier. Currently the Conservative Party have the contract to provide executive services to the UK Parliament and nation, although this cannot be guaranteed to be the case by the time the selection period has ended and the contract has been awarded.

In addition to the usual productivity metrics, we will be looking to provide the services without the usual quid pro quo of backhanders, chairmanships, directorships, media bias and general deceit. The development of policy built on logic and evidence - or even genuinely held belief and doctrine at a pinch - would be very welcome.

We would also encourage companies and partnerships who are developing nascent AI and robotics capabilities to use this as a test bed opportunity to develop products and services. Existing Conservative Party figureheads are not believable when it comes to sensitivity, empathy and compassion. Therefore this low barrier to entry would allow experimental non-Turing compliant solutions to be developed in a live environment with no apparent reduction in current levels of believability.

We believe this PPI offers and unrivalled opportunity for mutual benefit for UK plc and the winning bidder.
 
The banks, as a matter of course, are going to have to balance what the possibility of survival by advancing more money vs the cost of pulling the plug now.
 
Would it be possible that the banks have calculated the chance of a political shift to the left and realised that companies like Carillion are likely to lose tenders as works and services are brought back into the public domain - thereby making any additional lending unsustainable?

If even the banks have finally given up on so called neo liberalism and the Tories then surely that's a cause for celebration? The realisation that they cannot milk it any further.
 
Additional lending becomes unsustainable when the balance sheet becomes weak as shareholders sell down the value of shares, and the cashflow remains too weak to service the debts.
No political analysis required. The only question is of timing. Big loss now, or even bigger loss in the future.

The individual parts of Carillion are probably sustainable if they are properly capitalised - this can only happen if the company is broken up. Alternatively it could emerge from receivership as recapitalised (and private) with a massive debt for equity swap, the banks owning the business. Current shareholders lose out, but then shareholders have already sold down the value of the shares anyway. Government could probably not rescue this without breaching EU rules.
 
Apparently it`s all the fault of the banks, not the management at all.

http://www.bbc.co.uk/news/business-42710795

And just in case you were wondering about ever paying for early payments, guess what?
Suppliers could get paid earlier than the firm’s 120-day terms directly by Carillion’s partner banks in return for a fee.

The EPF was run in conjunction with banks including RBS, Lloyds and Santander who paid invoices once they were approved by Carillion.

But the system stopped working once Carillion became insolvent even though the banks continue trading as normal.
http://www.constructionenquirer.com...t-stranded-by-carillion-early-payment-system/
http://www.constructionenquirer.com...t-stranded-by-carillion-early-payment-system/
 
One that we've been watching closely recently was the Avaya chapter 11 process. Avaya had debts of around $6 billion when it entered chapter 11, following a debt restructuring it has exited with debts of around $3 billion. Avaya was always doing well with strong sales and a good profit margin and looking at Carillion they seemed to have quite a good profit margin as well.

Why is it an american company with debts that massively dwarf those of Carillion are able to restructure under protection but a UK company is pretty much left to fold?
 
Despite the Thai rail system being run by the state, Wiki gives the following.


The SRT has long been popularly perceived by the public as inefficient and resistant to change. Trains are usually late, and most of its equipment is old and poorly maintained. The worst financially performing state enterprise, the SRT consistently operates at a loss despite being endowed with large amounts of property and receiving large government budgets. It reported a preliminary loss of 7.58 billion baht in 2010.[5] Recurring government attempts at restructuring and/or privatization throughout the 2000s have always been strongly opposed by the union and have not made any progress.[6][7]

SRT's failings are reflected in passenger numbers, which have dropped from 88 million in 1994 to 44 million in 2014.[1]


So is state ownership really an indication of improvement ?
Travel on the Swiss Federal Railways and then tell me state funding doesn't work.
 
Additional lending becomes unsustainable when the balance sheet becomes weak as shareholders sell down the value of shares, and the cashflow remains too weak to service the debts.
No political analysis required. The only question is of timing. Big loss now, or even bigger loss in the future.

The individual parts of Carillion are probably sustainable if they are properly capitalised - this can only happen if the company is broken up. Alternatively it could emerge from receivership as recapitalised (and private) with a massive debt for equity swap, the banks owning the business. Current shareholders lose out, but then shareholders have already sold down the value of the shares anyway. Government could probably not rescue this without breaching EU rules.
This debacle is surely the end of the "bigger is better" doctrine held so dear by all the corporate growth conglomerates.
 
This government has one policy objective and one only, namely to transfer every last penny of public spending into private hands'.
Indeed. It's been happening ever since Thatcher and Reagan got together and invented the lie of "trickle down economics" as a sweetener so the the rest of us would acquiesce in the creation of an exponential increase in the number of billionaires. It's been such a catastrophe for everyone but the top one or two percent since then that I'm surprised the super-rich psychopaths who now lord it over us have not been dragged from their ivory towers and every last one of them lynched! That said, people still choose to believe the bullshit these same elites spout even after all this time. I ask you: how, after all that has happened since 1979, could anyone believe in their most fevered imaginations that a sociopathic billionaire (Trump) would be remotely interested in furthering the cause of the downtrodden masses. As long as we keep listening to these subhuman, self-interested monsters, the longer we will be under their heel.
 
One that we've been watching closely recently was the Avaya chapter 11 process. Avaya had debts of around $6 billion when it entered chapter 11, following a debt restructuring it has exited with debts of around $3 billion. Avaya was always doing well with strong sales and a good profit margin and looking at Carillion they seemed to have quite a good profit margin as well.

Why is it an american company with debts that massively dwarf those of Carillion are able to restructure under protection but a UK company is pretty much left to fold?

Possibly because the ones who 'matter' will not lose out? Looking at it from a layman's P.O.V. ..I'm also left wondering how any company with such massive debts can be described as having any real profit margin? Logically, the fact that Carillion has such massive debts which it is unable to service, clearly indicates that it is NOT a profitable company in any real sense. As usual, its last act will be to ensure that 'I'm Alright Jack' applies to those at the top.
 
Possibly because the ones who 'matter' will not lose out? Looking at it from a layman's P.O.V. ..I'm also left wondering how any company with such massive debts can be described as having any real profit margin? Logically, the fact that Carillion has such massive debts which it is unable to service, clearly indicates that it is NOT a profitable company in any real sense. As usual, its last act will be to ensure that 'I'm Alright Jack' applies to those at the top.
A piece in the Times on Monday:
"Richard Howson (the Carillion CEO) ran the embattled outsourcing company from 2012 until last July, when he stood down from the top job as Carillion issued a shock profit warning. Mr Howson, who enjoyed £1.5 million in pay and perks in 2016, stayed on in senior management for several months before leaving the company in the autumn. Carillion is continuing to pay his £660,000 salary and £28,000 benefits until October".

How does a bankrupt firm contrive to do THAT? Raid the pension fund?
 
Last edited:
Carillion is essentially a Ponzi scheme for rich men. They don't own equipment or employ builders. Instead they bid for tax-payer funded government contracts, get them and then sub contract them out to small companies. In the process they take a cut of the budget for their stock holders and managers.

These people are literally laughing with tax-payer money all the way to the bank. The Tories know this, but May lambasted Labour for the situation during PMQs today.

Blair in his son-of-Thatcher guise certainly deserves blame for his use of the PFI model. Corbyn however wants to do away with such Ponzi schemes and renationalise.

John McDonnell has written in The Guardian that the Carillion scandal must bury the rip-off PFI dogma for good: https://www.theguardian.com/comment...r-demolish-outsourcing-model?CMP=share_btn_fb

Jack
 
Last edited:


advertisement


Back
Top