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Big loss for Kajima

PFI housing horror a big part of UK operation's £85m loss for year to December

A DISASTROUS scheme to build new homes in East Anglia under the Private Finance Initiative was the main contributor to an £85 million loss for Kajima's UK operations.

The Japanese contractor's London-based business unveiled the loss for 2005 in its latest report and accounts filed at Companies House.

The firm linked up with developer Countryside Proper ties for the work in Cambridge, known as Accordia. It was supposed to build nearly 400 homes but pulled off the job at the end of last year.

A Kajima spokeswoman said: 'These losses were largely caused by Kajima's decision to extricate itself from the Accordia housing project at a cost rather than incurring further expenses down the line.'

The firm has previously admitted losing millions on a series of PFI schools projects.

It has also endured problems on another PFI project - to build the headquarters of the Health and Safety Executive on Merseyside - as well as a flats complex in Leeds.

Last year's £85 million loss is over £12 million more than the deficit racked up in 2004, while turnover in 2005 was cut by over 40 per cent to end up at £73.9 million.

The drop reflects a decision to cut back bidding construction jobs in the UK and concentrate on PFI investments instead.

But the spokeswoman added: 'Kajima remains committed to its current UK construction projects and will bid for future opportunities in their chosen markets, where appropriate.'

The company is protected by its Tokyo parent and in its accounts, the UK business states: 'The company is financed by an interest-free loan facility from its immediate parent and a further loan facility at variable money-market rates from a group company.'

Kajima trimmed its workforce by one fifth to leave just over 200 people on its payroll.

But despite the huge losses, the aggregate pay of the business's directors climbed £269,000 to hit £1.1 million. The highest-paid director, who is not named, picked up £190,000.