Is construction broken?

The Carillion disaster poses questions for the industry and the country.

Amid all the shock about Carillion, one of the most interesting pieces is in the FT. Matthew Vincent writes about why the company has gone into liquidation rather than administration. And he is pretty damning. Basically, the level of risk and low margins are such that nobody wants to take them on.

There is a lot I am struggling to understand, and I am sure others are too. Such as just how they could get in so deep, and how any company can owe quite so much. And what exactly happens to the PFI contracts now. And of course why Government let all those contracts to an organisation that was clearly in trouble.

But two things are clear. One is that the idea of economies of scale is not necessarily a good one. And that when Government said that PFI passed risk from the taxpayer to the private sector, it wasn’t joking. Although now that risk may come back to bite us all.

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