News

Rok collapse leads to scramble for contracts

12 November 2010

Contractors are tussling over the remains of failed contractor Rok, after the social housing repair and maintenance and newbuild contractor unexpectedly went into administration this week, reports Building.

Building reports that the attractive parts of the business include Rok's relationships with house-hold name insurers, including Axa, Tesco and Aegas. Rok provided repair services after insurance claims.

The magazine reports that Balfour Beatty, Carillion, Kinetics, Mears and Mitie are all actively considering deals in relation to Rok's social housing business, which includes the frameworks with insurers.

But Axa, which in September awarded Rok a £40m three-year deal to carry out emergency home repairs for policyholders, has already engaged alternative subcontractors to complete the work and is reviewing the overall contract.

A source told Building: “They’ve speeded up the sale process because insurers are threatening to take their business elsewhere, and it could affect the value of the business.”

The work up for grabs will also include Rok's deal on PV and solar thermal installations with Cornwall-based consultancy Enact. As CM reported (Nov/Dec issue), Enact handles installations for domestic clients of Tesco and Marks & Spencer.

Meanwhile, contractors including Leadbitter, Willmott Dixon and Morgan Sindall are also said to be looking at other parts of the Rok business. 

The collapse of construction’s highest-profile victim of the recession has led to 711 redundancies so far, 268 of which resulted from the closure of Rok’s Scottish plumbing, heating and electrical business, Scotland.

Administrator PwC announced the Scottish job losses after a potential buyer for the firm pulled-out. The locations hit included Dundee (74 redundancies), Inverness (130), Elgin (28), Thurso (19), and Fort William (17).

The collapse also leave £100m owed to sub-contractors and trade creditors, and £70m owed to Rok's bankers. 

Comments

Sadly, many small and medium sub contractors will also go to the wall over this event.

Martin Hickey ACIOB, 12 November 2010

Could this however all have been avoided if Mr Snook had not become so greedy and over-ambitious in his expansion plans? "What goes round comes round" Many have short memories but some will recall how when he amalgamated Hill & Lang, EBC & Sleeman & Cruise & Bridgeman - he very soon afterwards made redundancies. Maybe this policy has thankfully now come home to roost!!

Anon, 22 November 2010

Martin has it right when he draws attention to the numerous small and medium sub-contractors who are now at risk. I dread to the think on what the impact has been on ROK's procurement chain. The sudden influx of people into the market looking for similar roles is not going to be to anyone's benefit either. I take the point made by Anon but hindsight is always 20:20 whereas business development strategy has to include a degree of risk.

Neil Coker, 23 November 2010

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