Interserve client doubles provision against EfW hit
A client of Interserve has doubled the amount of money it had set aside to deal with the fall-out from a delayed energy from waste (EfW) plant, following the contractor’s pre-pack administration earlier this month.
Pennon, which owns Interserve client Viridor, announced late last year that it expected Interserve to pay out £72m over the troubled Glasgow Recycling and Renewable Energy Centre, which was originally set for completion in 2016. Viridor issued a notice of termination to Interserve in November that year and Doosan Babcock was brought in as a replacement in early 2017.
In its half-year results for 2018/19, Pennon said it was making a provision in its accounts of £8m in relation to the contract, which represented the difference between the gross £72m figure and the amount it expected to recover.
Now, it a trading statement issued today, it has doubled the provision to £16m.
Pennon said in a statement: “Given the recent announcements regarding Interserve plc entering into administration we are seeking further clarification regarding the financial position of Interserve Construction Limited the ongoing operating company with whom we contracted, which may change the level of provision to be announced with the full year 2018/19 results on 30 May 2019.
“We will continue to pursue recovery of all amounts due from the operating subsidiary Interserve Construction Limited and will take all the necessary legal and procedural steps to achieve this.”
The Glasgow plant is one of three – the other two are in Beddington and Dunbar – that have all now passed through the commissioning phase and are now undergoing optimisation ahead of full operation.