P3-built Royal Ottawa expects to sidestep fallout from Carillion’s collapse

Royal Ottawa
Royal Ottawa

News that one of the U.K.’s largest contractors is folding may be sending shockwaves in business circles around the world, but a local health-care facility that relied on Carillion to build and maintain its hospital is confident that services won’t be disrupted.

Carillion announced today it is undergoing compulsory liquidation after failing to secure short-term financing to pay down its $2.6 billion in debt.

The British contractor’s Canadian arm, which employs some 6,000 people in Canada, has provided facilities management services for the Royal Ottawa Mental Health Centre on Carling Avenue since its 2006 opening alongside financier Almers Infrastructure and contractor EllisDon. The three firms work together as The Healthcare Infrastructure Company of Canada (THICC).

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The Royal Ottawa has a $12-million annual contract with THICC for services that range from keeping the power on to changing linens. Roughly a third of that contract is “flow-through” services such as paying the electricity and food bills.

Carillion Canada is subcontracted through this group, with funds paid out on a monthly basis.

The hospital found out about Carillion’s impending closure this weekend, according to chief financial officer Cal Crocker. He tells OBJ that he anticipates the parent company’s liquidation will have little impact on day-to-day operations at the Royal.

As part of its restructuring process, Carillion has been selling off its healthcare divisions, striking a deal to part with its U.K. healthcare arm last October. Crocker says the plan has always been to sell off the Canadian division as well.

“Our sense is that won’t change, hopefully the sale of the Canadian operation will happen faster,” he says.

If Carillion Canada were forced to close its services entirely, Crocker says THICC would bring in a new subcontractor to fill the roles, likely even through the same employees.

With a report by The Canadian Press

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