16 May 2018 by Joshua Doherty

Interserve to be investigated over EfW exit

Construction firm Interserve is being investigated by the Financial Conduct Authority over its handling of information relating to exiting its energy-from-waste (EfW) business.

Interserve was served notice on its contract to build Viridor’s Glasgow Recycling and Renewable Energy Centre in 2016

Interserve said it will “co-operate fully with the investigation and will update the market on the outcome in due course”.

The investigation is in relation to the period from 15 July 2016 to 20 February 2017. During this time, the company announced it was exiting the EfW market in its half-year results for 2016.

Within the EfW sector, the company held six contracts for the development of waste facilities with revenues of £430 million, all of which were entered into between mid-2012 and early 2015. Projects included work on facilities in Glasgow, Derby, Margam, Templeborough and Dunbar.

In November 2016, Interserve was served with a notice of termination on its Glasgow EfW plant after Viridor claimed it had “continually and repeatedly failed to meet delivery milestones”.

On 20 February 2017, the last day in which the investigation period covers, the firm announced that the cost of its exit from the EfW market had more than doubled from £70 million to £160 million.

Exiting business

In its yearly financial report, published last week, Interserve explained that “these contracts, most notably the project in Glasgow, have been impacted by issues relating to the design, procurement and installation of the gasification plant.”

The statement added: “Progress on these issues was adversely affected by sub-contractor insolvencies and the consequential impacts on project timing and costs.”

“We expect to substantially complete the construction of the projects in the first half of 2018, though significant uncertainty remains on the timing of commissioning,” the statement added, continuing: “During the period we completed the construction of the Derby EfW plant and commissioning is progressing well. The plant started receiving municipal waste in January, generating electricity in February and has now received its Renewable Obligations Certificate from OFGEM.”


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