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A MAJOR public-service provider crippled with £500 million of debt is at risk of becoming the next Carillion, Unite warned today.
Interserve, which is involved in maintenance of schools, prisons, hospitals and roads and oversees tens of thousands of people on probation, is seeking a rescue deal to refinance its debt.
The company says that if it does not receive more cash it may have to sell off part of its business.
Interserve employs tens of thousands of people in Britain, including many working on contracts with the National Health Service and the Foreign Office.
It has a £35m contract to provide cleaning, security, meals, waste management and maintenance at King George Hospital in east London: public money spent creating private profits for shareholders.
Unite warned that another government-initiated privatisation folly could be heading for the financial buffers.
The signs are that Interserve could follow the privatisation disaster of construction firm Carillion, which collapsed leaving public contracts unfulfilled and putting thousands of people out of work.
The union’s assistant general secretary Gail Cartmail said: “The financial difficulties that Interserve finds itself in are another dire warning of the dangers of outsourcing public services for private profit.
“The lessons so painfully learnt by the collapse of Carillion appear in danger of being repeated. If so, this could see the hard-pressed taxpayer picking up the tab yet again.
“The moral is that public services should be provided by the public sector as the record of these outsourcing behemoths has been woeful.
“Unite has 1,200 members working across Interserve. We will be monitoring developments very closely and giving our members maximum support in the coming days.”
The company’s share price plunged to a 30-year low last month.
Interserve blames its financial problems on cancellations and delays in construction contracts and difficulties with waste-to-energy projects in Derby and Glasgow.
Its infrastructure projects include refurbishing Rotherham Interchange bus station in Yorkshire, and upgrading sewers and water pipes in Northumbria.
Interserve said: “The fundamentals of the business are strong and the board is focused on ensuring Interserve has the right financial structure to support its future success.”
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