TAYLOR WOODROW has run into payment difficulties with the client on its pounds149M
St Petersburg Station project in Russia.
'There has been a delay in recent payments and we are talking to the client to find out what the problem is,' explained Taylor Woodrow chairman and chief executive Colin Parsons.
'The job is still in operation but the whole situation is in a state of flux.'
Taylor Woodrow and Swedish contractor Skanska are joint venture management contractors on the station and office block development which they are building for state owned railway company VSM.
News of the problem emerged this week as Taywood announced its half year results.
Taywood's contracting operations made a pre-tax profit of pounds3.1M in the first half of 1998 compared with pounds1M for the same period of last year. Turnover was up slightly from pounds301M last year to pounds309M. Group pre-tax profits were pounds48M compared to pounds36.2M last time, while turnover increased to pounds668.4M from pounds625.8M.
Parsons said the group was likely to reduce its exposure to the Russian market as a result of the current Rouble crisis despite the fact that the St Petersburg project is covered by British export credit guarantees.
Parsons expressed concern about the effects of the economic crises in Russia and South East Asia on future workload. 'The effect on the world economy, of the economic downturn in the Far East and in Russia, has been greater than originally anticipated. The concern is where is future profitable work going to come from.'
The company said it had identified a replacement for chief executive John Castle who left the company in November last year.