Carillion became the largest corporate liquidation in UK history. A year later, the collateral damage continues with stalled public projects dragging on while ‘Mom & Pop’ vendors and subcontractors face insolvency, unable to collect monies due. Surety was designed to protect these folk, taxpayers and contractors alike. The head scratching question remains – why didn’t the UK government use it?
Many news stories have illuminated the surface economic impact of Carillon’s demise, but few have burrowed into the root causes which led to its ill fate. Fewer have shed light on lax performance requirements in the UK, which enabled a bad situation to evolve into a massively epic failure. Triggered Surety protection is estimated in the range of $100 million, concentrated amongst vendors and suppliers where surety is widely adopted such as North America. In total, it’s a mere fraction of the £2 billion loss absorbed by 30,000 suppliers and sub-contractors across countries. Increased suretywould have softened the blow, also protecting thousands of jobs and livelihoods.
“Too big to fail has come to the world of construction & engineering”, says Steve Raffuel, President of Raffuel Surety Group and The Surety Alliance “but they do, and they will continue. The problem is that we have become quite top heavy with global construction & engineering firms who have an unlimited appetite, precariously perched on surprisingly weak balance sheets. What such oversight exists when global construction & engineering firms acquire government funded work worth billions upon billions?”
The Raffuel Surety Group’s study analyzes the contributions of executives, UK authorities and public accounting firms leading to Carillion’s insolvency, alongside, investigating the motivations behind big banks and corporates in maintaining status quo related to inadequate performance security. It calls for a larger, public discussion amongst industry leaders to advocate for the public globally and integrate surety mandates into public works projects aiding in the mitigation of irresponsible practices that lead to failures of such magnitude.
Headquartered in Princeton, NJ, Raffuel Surety Group is a team of seasoned professionals, spanning decades of experience in the surety industry, risk management, legal, engineering, project finance and investment management fields. The firm’s diverse composition and broad surety market representation excels in the understanding of unique and complex transactions. RSG founded a proprietary international surety brokerage network designed to provide ‘boots on the ground’ representation in major money centers worldwide, sharing its depth of knowledge and resources for the benefit of its members and their clients. Surety is what they do. It’s all that they do.
If you would like more information about this topic, please call Steve Raffuel at 609-924-2426, or email at firstname.lastname@example.org.
Company Name: Raffuel Surety Group
Contact Person: Steven Raffuel
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Phone: (609) 924-2426
Country: United States