The award of a new public sector contract to Interserve has attracted controversy just days after the infrastructure and services firm announced a recovery plan that would seek to pay its debts by issuing new shares.
It was announced on Monday that Interserve has been awarded a £25m contract by Cwm Taf University Health Board, as part of the next phase of the £36m redevelopment of Prince Charles Hospital in Merthyr, which is funded by Welsh Government.
Interserve will also deliver the provision of a new staff changing area within the courtyard; construction of new plant rooms; refurbishment of first-floor main switch rooms; a new car park and external infrastructure works.
At the weekend the firm, which manages contracts in roads and rail as well as other key public services, issued a statement outlining a 'deleveraging plan'.
This led the Labour Party to call for it to be banned temporarily from new public sector contracts.
Shadow minister for the Cabinet Office Jon Trickett MP said: ‘Less than two weeks ago, I asked the Government what extraordinary steps they are taking to monitor the financial health of Interserve.
‘They told me they “do not believe that any strategic supplier is in a similar situation to Carillion,” and in November Interserve continued to win public sector contracts worth millions, despite effectively being insolvent.'
He added: ‘The Government must take urgent steps to ensure all existing contracts with Interserve are reviewed and that they are prevented from bidding for public sector contracts until they have proved they are financially stable and there is no risk to the taxpayer.’