黑洞社区

The boss of Interserve鈥檚 construction business has said it expects to have wrapped up its work completing its disastrous energy-from-waste (EfW) contracts by the end of this year. 

The firm has racked up losses of 拢215m on the initiative which began in July 2012 with the firm winning a 拢146m contract to build a plant in Glasgow which kicked off a slew of jobs across the country.

But Interserve said it was pulling out of the market 18 months ago after running up crippling losses on the Glasgow job.

The managing director of its UK construction business Gordon Kew told 黑洞社区: 鈥淭he whole energy-from-waste portfolio we expect to be out of this year.鈥�

The scale of the losses forced it into separating out its exited business under Ian Renhard, Kew鈥檚 predecessor, who has taken charge of EfW jobs reporting directly to main board director Dougie Sutherland.

Kew, who became managing director in October 2016, said: 鈥淗aving it as a separate business allowed me to run the rest of the [construction] business unencumbered.鈥�

The firm has completed work on all six of its schemes 鈥� including Glasgow which it was removed from at the end of 2016 鈥� apart from its job at Dunbar in Scotland.

It is on site carrying out commissioning work at plants in Derby, Margam, south Wales, and Rotherham, South Yorkshire.

But Kew said the firm came unstuck when it agreed to carry out complex process engineering work at Derby and Glasgow where Interserve took on responsibilty for making sure the plants produced their stated MW output. 鈥淭here was definitely a capability gap,鈥� Kew admitted.

鈥淲e went into a new sector that we鈥檇 thought we鈥檇 prepared for and clearly we hadn鈥檛.鈥�

And he said the firm won too many jobs. 鈥淥ur order book got full very quickly. It鈥檚 been a sobering experience. [Energy-from-waste] forced a refinancing and it鈥檚 a major catalyst as to why we had to undergo restructure of the business.鈥�

Pennon, the parent company of Interserve鈥檚 Glasgow client, Viridor, said in March it was in discussions with Interserve 鈥渨ith regard to the contractual settlement鈥� but Kew said: 鈥淲e don鈥檛 concur with their view of life and it鈥檚 a position we鈥檙e entirely comfortable with.鈥�

Interserve鈥檚 UK construction business posted revenues of just over 拢1bn last year but Kew said he expected income to be 鈥渟lightly down鈥� this year. The firm鈥檚 largest current job is a 拢200m scheme to build a new facility at the Defence and National Rehabilitation Centre at Loughborough.