Council chiefs respond to concerns over Siglion sites after Carillion collapse

The former Vaux Brewery site viewed from St Mary's Car park.
The former Vaux Brewery site viewed from St Mary's Car park.

Small businesses based in Sigilon-owned premises in Sunderland will not be affected in wake of the Carillion collapse, a council chief has said.

At a Sunderland City Council meeting this week, Lib Dem councillor Stephen O’Brien asked what the impact would be on such businesses based in properties owned by Siglion - the company the council launched with the ailing construction firm.

Coun Mel Spedding said Siglion assets will not be vunlerable to Carillion's creditors.

Coun Mel Spedding said Siglion assets will not be vunlerable to Carillion's creditors.

The UK’s second-largest construction company went into liquidation this month after being overwhelmed by huge financial troubles - with debts of £1.5 billion.

Coun O’Brien said: “Can the Deputy Leader clarify what the current situation at Siglion means for small business owners operating from Siglion-owned commercial premises and will Siglion be pushing ahead with market rents in these premises?”

But Sunderland Council Cabinet Secretary and Labour councillor Mel Speding responded by saying: “There will be no impact on business holders operating from Siglion or commercial premises and Siglion will not be changing their plans for rent reviews.”

Siglion is responsible for the redevelopment of the Vaux site in the city centre - where work has been suspended - as well as the regeneration of Seaburn and a housing site of 750 earmarked for Chapelgarth, a plot of land near Doxford Park.

Liberal Democrat councillors Stephen OBrien (left) and Niall Hodson (right) outside Sunderland Civic Centre.

Liberal Democrat councillors Stephen OBrien (left) and Niall Hodson (right) outside Sunderland Civic Centre.

It is also responsible for Houghton Business Centre, Pennywell Business Centre, River Wear Commissioners Building, The Place, Stanfield Business Centre as the company also owns a number of industrial units and retail units across the city.

Earlier this week the Echo reported how talks were continuing between Silgion and liquidators PricewaterhouseCoopers (PwC) in the hope work will restart on the redevelopment of the Vaux site.

In light of the situation, Lib Dem councillor Niall Hodson asked about Siglion’s assets in the city. He said: “Siglion’s accounts list some £26 million in fixed assets.
“Given the liquidation of Carillion, can the Deputy Leader clarify whether assets held by Siglion will be vulnerable to Carillion’s creditors?”

But Coun Mel Speding again rebutted claims that it would affect assets, saying: “I can confirm that assets held by Siglion will not be vulnerable to Carillion’s creditors.”

This week, Siglion chief executive John Seager said they were doing “everything in our power” to see work on the Vaux site resume as quickly as possible.

He said: “Vaux is a hugely significant development for Sunderland, understandably there has been some concern about what the liquidation of Carillion means for the future of the site.

“We have to follow the direction of liquidator PwC in terms of what we can and cannot say at this time, but we do wish to reassure people that we are doing everything in our power to ensure that work resumes on site as quickly as possible.

“The site was locked down last Monday by PwC due to the closure of Carillion Construction – the appointed contractor responsible for building the first development on Vaux; this is standard practice in these circumstances.

“We have been working tirelessly on the process to allow us to move forward as quickly as possible whilst maintaining continuity in terms of the sub-contractors involved and the overall quality of the development. Our absolute priority remains to deliver a development that the city can be proud of.”

Siglion stressed that it is not inviting approaches from companies looking to take over construction work on site at this time.