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ISG collapse impact ‘far worse’ than initial estimates
Cristina Lago Deputy Editor
(Image: Pjhpix via Dreamstime.com)
Industry analyst Glenigan says its data shows the impact of ISG’s collapse is “far worse” than initial figures suggested.
First analysts’ reports focused on the repercussions of contractor’s fallout on public sector projects, which account for a third of ISG’s pipeline.
However, Glenigan said these reports “significantly underestimated” the impact, which will affect “the whole of the construction sector for months to come”.
ISG had 57 projects totalling more than £2.5bn in progress on site and had been awarded 33 contracts on a further £1.7bn of work at the time of filing for administration. Additionally, three projects were close to completion.
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Some of the major schemes ISG was building include the Institute of Neurology for UCL in London (£158m), the Slough Data Centre Campus Phase 2 in Berkshire (£200m) and the Fujifilm Diosynth Biotechnologies Facility in Billingham, Cleveland (£200m).
All of ISG’s projects were stopped with immediate effect on Friday 20 September.
ISG was also on 19 construction frameworks with a combined value of over £104bn.
(Credit: Glenigan)
‘An opportunity for agile suppliers’
ISG’s collapse presents a major challenge for contractors and subcontractors who could be left “seriously out of pocket” and risking a large number of jobs.
However, Glenigan said there is “a commercial opportunity” for “agile suppliers” to ensure projects are completed and affected subcontractors are supported.
Glenigan’s economic director Allan Wilen said: “ISG’s demise is set to dampen overall industry workload in the near term as clients look for contractors to complete projects currently on site and as recently awarded projects are retendered.
“Its subcontractors and suppliers will be under increased financial pressure and contractors nationwide will need to review and work with their own supply chains to minimise financial stress and avoid any additional loss of industry capacity.”
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