Construction Enquirer Subcontractors furious after payment protection promises evaporate in wake of Roadbridge collapse
Project Bank Accounts on HS2 have been dismissed as “not worth the paper they are written on” after failing to protect subcontractors hit by the collapse of civils specialist Roadbridge.
Subcontractors and suppliers have been left holding unpaid invoices worth more than £22.5m after Roadbridge went down – with most of the debts racked up on the firm’s HS2 contracts.
Its largest deal was in a joint venture with Tarmac working for main contractor EKFB (Eiffage, Kier, Ferrovial Construction and BAM Nuttall).
Roadbridge was also working on a smaller job as a subcontractor to the Align JV of Bouygues, Sir Robert McAlpine, and VolkerFitzpatrick.
The supply chain on HS2 is supposed to be protected by Project Bank Accounts which were introduced nearly two years ago to “provide an element of protection against insolvencies upstream in the supply chain.”
HS2 added at the time: “The use of PBAs provides greater transparency of payments and offers speedier payments for companies at all levels of the supply chain. Payments are made out of one pot and do not have to cascade through multiple tiers of contractors.”
The HS2 procurement director at the time said: “This announcement means that companies, big or small, working with us will feel confident and supported as we work together to build Britain’s new low carbon high speed railway.”
But suppliers to Roadbridge on HS2 are fuming after the firm’s demise left them out of pocket.
One said: “It’s the same old story – we are the people getting stiffed again when a bigger contractor goes down.
“We were supposed to be protected by project bank accounts but they aren’t worth the paper they are written on.”
The Enquirer understands that PBAs on HS2 only actually cover Tier One contractors and a few Tier Two companies.
That has stunned payment expert Rudi Klein who led the campaign to have PBAs introduced on HS2.
He said: “After negotiating with HS2 over some years to persuade them to use PBAs I’m extremely perplexed by the Roadbridge collapse and the losses incurred by subcontractors.
“A PBA should have been in place with the result such losses would have been minimised.
“PBAs are primarily for the benefit of tier two and three contractors so I suggest HS2 revisits its PBA policy to ensure there’s no repeat of the Roadbridge debacle.
“HS2 has set great store by its measures to enhance payment security along the supply chain and the Roadbridge collapse has put a severe dent in it.
“My intuition is that HS2 has succumbed to main contractor pressure to row back on its use of PBAs.
“This is the only explanation for HS2’s lacklustre response to the misery the Roadbridge collapse has inflicted on subcontractors.”