The GNWT met with BHP (Boreal Health Partnership: Clark, Bird, Carillon) today to get any additional updates. From the GNWT’s perspective nothing has changed with the new filing by Carillion Canada (CC) for credit protection. This filing could complicate things for BHP and the lenders but not for the GNWT.
- BHP are still bound by the requirements of the PA, as identified in the BN sent to MLAs yesterday.
- The reason why Carillion Canada requested and received protection is so it could continue operations and provide comfort to its clients that it is taking steps to be a growing concern entity. The receiver for its parent company, Carillion plc, cancelled all financing to Carillon Canada so what this does is give time to secure its own financing from alternative sources given the parent is no longer back stopping the operation.
- BHP still confirmed November 30th service commencement. The GNWT has raised the concern of a compressed commissioning schedule if the worse-case scenario unfolds and Carillion cannot meet its obligations and a new service provider needs to be provided. BHP acknowledge this concern and again confirmed they are taking proactive steps to stabilize the situation and uncertainty.·
- All work activity on worksite is proceeding as planned and all joint project meetings will take place as scheduled with all representatives actively participating.
- While the GNWT will need to be vigilant on event related to Carillion as they unfold, the activities to date confirms the P3 approach is working as intended for Stanton, with BHP and its lenders absorbing the impact of the recent Carillion events.
It is important to remember:
o the hospital is 75% built already, and GNWT has not yet paid any amount towards its capital (debt and equity), and won’t pay anything until it is completed to the required standard
o the Carillion services contract is with BHP and not with GNWT, such that BHP must resolve the recent Carillion events
o the future service payments are performance based, and will be reduced or avoided if the facility does not perform to the required standard (not a feature of conventional procurement)
o the project financing and ring fencing approach is working as intended to isolate the Stanton project from the Carillion corporate challenges
- Carillion has no role in the retrofit to the old hospital.