Laing O'Rourke joint venture walks away from £1.7bn HS2 Euston revamp

 
Oliver Gill
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Laing O'Rourke last summer won a £1bn contract to redevelop Manchester Airport (Source: Laing O'Rourke)

A joint venture including troubled contracting giant Laing O’Rourke has pulled out of the running to land a £1.7bn HS2 redevelopment of London Euston.

HS2 confirmed Laing O’Rourke and Canary Wharf Contractors had withdrawn from the process.

It is understood Canary Wharf got cold feet after last week losing out on a separate contract to oversee HS2 station designs.

Today’s withdrawal leaves four firms, including London Bridge builder Costain, left to fight it out for the £1.65bn Euston deal. HS2 is expected to announce the winning bidder in autumn.

It will come as a fresh blow to Laing O’Rourke, which breached a Companies House deadline for filing its accounts months ago. In December, the contractor said its March 2017 financial statements would be lodged by the end of January, after flogging a loss-making project to build Montreal's new university hospital.

However, the contractor, which employs around 15,000 people in the UK, subsequently announced fresh delays, simply saying meeting the deadline had “not been achievable”.

"Certain problem contracts"

Laing O'Rourke had a difficult year to 31 March 2016, racking up losses of £264m. It completed a debt restructuring in April 2016 amid "challenging trading and financial circumstances in particular in respect of certain problem contracts".

Accounts from 11 months ago have still not been filed, according to Companies House.

Read more: Laing O'Rourke says its accounts will be delayed again

Laing O’Rourke is spearheading the development of some of Britain’s biggest infrastructure projects including the controversial Hinkley Point C nuclear power station. Previous contracts included revamping Manchester City’s Etihad Stadium and Heathrow Terminal 5.

Britain’s biggest privately-owned contractor won a £1bn deal to transform Manchester Airport’s terminal 2. Sources at the airport said Laing O’Rourke’s finances were not being monitored in any different manner to other suppliers.

Laing O’Rouke failure to delivers it accounts to authorities has been labelled as “disturbing” by some analysts. The contractor said at the start of the month it was in regular contact with “financial partners”, Companies House and auditors PwC.

Laing O'Rourke has been approached for further comment on today's withdrawal. Canary Wharf Contractors and Manchester Airport declined to comment.

Read more: Is Laing O'Rourke another contractor we should be concerned about?

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