Chris Grayling: Delivery of HS2 will not be delayed by collapse of Carillion

Chris Grayling has insisted the delivery of the UK’s new high speed rail network will not be delayed by the collapse of Carillion as he attacked critics who have called for him to quit.  

The Transport Secretary has faced criticism after the Government awarded the construction company HS2 contracts despite a profit warning having been issued.

But Mr Grayling said the HS2 timeline remained unchanged and that there would be no financial implications for the project as a result of Carillion filing for insolvency.

Meanwhile, the Cabinet minister, who has been under fire in recent months for his handling of rail fare increases and the running of the East Coast Mainline, also attacked his critics as he accused them of being “onesided”.

Mr Grayling defended the Government’s decision in July 2017 to appoint Carillion to deliver part of the new HS2 rail line as he insisted ministers had received “secure undertakings” from the company.

Carillion was announced as one of the winners of £6.6billion worth of contracts just a week after the company issued a profit warning which triggered a share sell-off.

The wisdom of awarding the contracts has again been brought into question after Carillion plunged into liquidation on Monday.

But Mr Grayling, rebutting suggestions that he should quit as Transport Secretary, said in a letter published in The Times: “Neither the timeline nor the finances of HS2 will be affected by Carillion filing for insolvency.

“The contracts awarded after their profit warning were joint ventures and we ensured the work would continue regardless.

“Ruling a company out of being part of a consortium bidding for big government contracts because of profit warnings might seem attractive but it is almost certainly unlawful.

“In addition it would risk pushing a British company deeper into difficulties. No responsible government should do that.”

Mr Grayling has also faced criticism over the early termination of the East Coast rail franchise involving Stagecoach and Virgin.

The companies had agreed to pay the Government £3.3billion to run the service over eight years until 2023 but it was announced in November that a new East Coast Partnership will take on responsibility for both intercity trains and track operations on the route in 2020.

The move has been described as a “bail out” by critics but Mr Grayling rejected the idea that taxpayers would “lose out”.

He said in the letter: “In fact the operator has paid every penny owed to taxpayers. I am holding them to the £165 million guarantee that we insisted upon when they took the franchise.

“Back in 2009, when National Express handed the keys back to Labour, there were no comparable guarantees.

“The money that the franchise pays to the government is 20 per cent higher than it was under public ownership.

“Whatever happens, the taxpayer will continue to receive hundreds of millions of pounds. Talk of billions lost is misleading.”