Powys concern over Kier ties

By Elgan Hearn, Local Democracy Reporter

An urgent review of the contracts Powys County Council have with construction giant Kier Group is being called for after the company suffered a 50% slide in its share price over the last month.

The market had jitters after Kier announced an emergency plan to raise £264 million to cut its debt of more than £600 million.

Concern has been raised locally with Kier in partnership with Powys County Council, looking after the housing stock in joint venture, Heart of Wales Property Service (HOWPS).

Its purpose is to repair and maintain the housing, public and commercial buildings that were looked after by the council.

They have also been building a flagship project in Brecon “Y Gaer” – Welsh for fort.

Plaid Cymru Group Leader, Cllr Elwyn Vuaghan, said in a committee meeting: “We have a joint venture with Kier.

“I want assurance that Kier is still a viable entity. And what risk assessment has been done to minimise the liabilities to Powys Council?

“In recent months we have seen a major outsourcing company, Carillion, going to the wall and another company, Interserve, in severe difficulty.”

Labour Group Leader, Cllr Mathew Dorrance, said: “It cannot be right that a company propped up by public funds evades any public scrutiny. We put forward a plan to ensure democratic accountability of Heart of Wales Property Services so that it serves the people of Powys not profit margins.”

Cllr Dorrance believes that the ruling coalition’s decision to vote against the motion could have consequences now.

Haydn Mursell, chief executive of Kier Group plc, said: “There has been a recent change in sentiment from the credit markets towards the UK construction sector, with various lenders indicating that they will be reducing their exposure to the sector.

“This has led to lower confidence among other stakeholders and an increased focus on balance sheet strength. The Rights Issue is intended to address these issues, better position Kier to continue to win new business and further strengthen our market leading positions.”

A spokesman for Powys County Council said that questions on the viability of Kier should be directed to the company.

Powys County Council Director of Environment and Board Member of the Heart of Wales Property Services, Nigel Brinn, said: “We can confirm that the council has received formal questions regarding Kier and that responses will be provided at a meeting of the full council in January.”