Rok collapse leaves buyers picking up the pieces

10 November 2010

10 November 2010 | Peter Searle

Buyers are speaking to the administrators of building firm Rok after work on maintenance projects was forced to cease.

Rok is the second UK housing services supplier to go into administration in three months, after Connaught collapsed in September. Rok’s failure comes months after it suffered a £3.8 million loss for the first half of the year.

Highlands and Islands Enterprise, with whom the firm was sole contractor of building projects worth up to £32 million over the next four years, said it will be contacting administrator PricewaterhouseCoopers about the future of its contract but will ensure projects “will be completed despite this setback”.

 And a spokesman for Bristol City Council, another Rok customer, said since news of the supplier’s collapse: “Rok has withdrawn from all current construction sites.”

In late 2006, Rok won a contract with Bristol City Council reportedly worth £37.5 million over the course of the next five years. It covered the building of 12 new council properties and the maintenance of their high-rise buildings.

Rok plc and Rok Building Limited both went into administration on 8 November, leaving some 3,800 employees unsure about their future

Mark Jervis, joint administrator and partner at PwC, said: “Due to difficulties in meeting the company’s financial obligations, the company and certain subsidiaries have been placed into administration to protect the business and assets. Our immediate priority is to urgently review the financial position of the company and seek a buyer of the businesses.” 

The demise of housing services firm Connaught has left councils needing to find a replacement supplier, either through a new round of tendering, or by novating the contract to another vendor. While novation risks a legal challenge under EU procurement law, tendering can incur greater cost and delay to work.

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