Carillion subsiduary company Carillion (Maple Oak) Ltd was Leeds City Council’s preferred developer to restore and refurbish the Grade II listed Engine House on the Tower Works site on Globe Road, Holbeck.
But the council said even though Carillion (Maple Oak) Ltd is still solvent there is too much uncertainty and the contract will not be awarded to the company.
A Leeds City Council spokesman, said: “Having looked carefully at the project, Leeds City Council have taken a decision that it is not in the best interests of the city to continue with this procurement process.
“Although it did not directly affect Carillion (Maple Oak) Ltd, who are still a going concern, Carillion PLC entering liquidation in January 2018 raised concerns the proposals put forward by Carillion (Maple Oak) Ltd would not result in the restoration of the Engine House being completed as wished.
“No financial payments have been made to them in relation to this scheme and the council’s executive board will look at recommendations for the future regeneration of the Engine House later this year.”
A spokesman for the Official Receiver, the liquidator for the Carillion group, said: “Work on all Carillion construction contracts paused on 15 January 2018 when the company entered into liquidation. This was to enable time for customers, including Leeds City Council, to determine the future of these contracts.”
A report to Leeds City Council’s head of regeneration, states there is a risk Carillion (Maple Oak) may try to claim compensation for costs or lost profits. The report states that the courts have been “very reluctant to support such claims” and that “the risk of such a claim is low.”