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Costain settles problem waste PFI contract

Costain has reached an agreement to settle its problem waste management project with the Greater Manchester Waste Disposal Authority.

Costain, which served as a subcontractor to Viridor Laing on the project, said it would “fully demobilise all of its remaining activities” on the project by 29 September 2017.

“The financial impact for Costain of this settlement is in line with the provisions we have previously taken for the project,” the firm added.

In May the GMWDA revealed that it would be terminating its £3bn waste PFI with Viridor Laing.

The 25-year deal to deliver long-term waste management for the city was awarded in January 2007.

As part of the deal, Costain was handed a £397m subcontract to design, construct and commission 46 waste facilities across Greater Manchester.

However, the works have been beset with problems, including rectification work on a number of facilities across the contract.

To date, Costain’s losses on the contract have exceeded £15m. Announcing its full-year results in March, the contractor revealed that it had set aside £15.1m in costs and provisions due to the troubled contract.

Construction News reported in February this year that GMWDA had raised concerns over the speed and quality of repair works being carried out under the contract

A report produced at the time by key figures at the GMWDA said the time taken to complete rectification works through the deal had been “significant”. 

Costain settles problem waste PFI contract

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