A Carillion JV has been awarded £158m of government contracts

Emma Haslett
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The joint venture will deliver catering support services (Source: Getty)

Carillion, the troubled construction giant which had almost £600m wiped off its market capitalisation last week, said today one of its joint ventures has been awarded £158m of government contracts.

The company has been awarded two contracts by the Defence Infrastructure Organisation (DIO), the body in charge of looking after military infrastructure, under its Hestia facilities management programme.

Under the contracts, the joint venture will deliver facilities management services including catering, retail and leisure and hotel and mess services, with one contract starting in November and the other beginning in January. Between them, they will serve 233 sites, employing more than 2,500 people.

Although the two deals are worth £158m over the initial contract period of five years, Carillion said it will have the opportunity to double that through catering and retail sales.

"We are delighted to be awarded these contracts," said Keith Cochrane, Carillion's interim chief executive.

"The DIO is a key support services customer with whom we have built a long-term successful partnership. We are committed to building on this relationship and on our position as a leading supplier to the DIO by using our core skills and capabilities to deliver high-quality services."

Read more: Hedgies refuse to budge in pursuit of Carillion

Bad week for Carillion

Shares in the company bounced yesterday after the Department for Transport picked Carillion joint ventures to build one of the phases of its HS2 rail network yesterday.

However, it emerged HS2 had "sought assurances" over Carillion, following a 70 per cent fall in shares last week after it warned on profits.

Yesterday the company also drafted in EY to put together a strategic review, after it enlisted HSBC as a financial adviser last week.

Read more: BT's Openreach checks £1.5bn Carillion deal

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