Contractor Costain has agreed exit terms for its problematic Greater Manchester waste management PFI contract.
In its half-year trading update yesterday (23 August) Costain said that talks on exiting the legacy waste contract were ongoing. However, today the firm announced it will fully exit the project by 29 September after the Greater Manchester Waste Disposal Authority terminated its £3bn 25-year waste contract with operator Viridor Laing.
A decade ago Costain won a £397M contract to design and build a network of 42 waste facilities across Greater Manchester, subcontracted by Viridor Laing, a JV between Viridor and John Laing. But the firm stopped bidding for new waste contracts after problems with the project resulted in significant financial losses.
Costain said a “consensual termination” of the contract had been agreed, and that financial implications were in line with provisions previously taken for the project. Following the announcement, Viridor Laing will transfer into authority ownership.
The news comes after Costain explained yesterday that project delays were to blame for its decision to pull out of tunnelling and marine works at Hinkley Point C, leading Balfour Beatty to be named preferred bidder.
Despite these issues Costain reported its underlying operating profits are up 34% to £21M and revenue rose to £847.8M from £760.1M in June 2016.