Firm had previously put a 拢70m pricetag on the decision
Interserve has said the cost of closing its energy-from-waste business will more than double to 拢160m.
The contractor, which is due to release its full-year results next week, said last August it was getting out of the sector after racking up 拢70m-plus losses.
But in an update to the Stock Exchange this morning, the firm said this had now spiralled out to 拢160m because of continuing uncertainties over the conclusion of the contracts and an expected lengthy period of litigation over the firm鈥檚 removal from the 拢150m Glasgow Recycling & Renewable Energy project.
It also blamed the increase on the impact from the administration of Interserve鈥檚 main gasification subcontractor Energos and the likelihood of recoveries from claims against third parties.
Interserve, who announced three months ago that its chief executive Adrian Ringrose (pictured), who became boss in 2003, was stepping down, added that it expected to complete the majority of the construction and commissioning of the EfW contracts during the year but warned the resolution of claims and its obligations in respect of warranties to continue beyond this.
The client behind the energy-from-waste power plant in Glasgow Viridor said Interserve 鈥渞epeatedly failed鈥� to meet its delivery milestones.
Last November, Viridor said it was making the move to 鈥減rotect鈥� the project and in a statement added: 鈥淲ith Interserve now reporting a forecasted failure to meet a contracted long-stop construction completion date, Viridor will commence a contractual process to terminate its contract with Interserve.鈥� Interserve said it would 鈥渁ssess the implications of this development with our legal advisers鈥�.
Interserve also undertook legal action against Swiss-based Hitachi Zosen Inova (HZI) in December last year after it was thrown off a 拢165m energy-from-waste job EnviRecover plant in Kidderminster in Worcestershire.
According to documents field at the High Court, HZI accused Interserve of 鈥渘ot proceeding regularly and diligently with the works鈥� but in its claim Interserve accused it of 鈥渞epudiatory breach of contract鈥� when HZI made its decision in July last year.
Interserve claimed it was wrongly removed from its contract, which began in May 2014 when construction on the project began.
In this morning鈥檚 up date, Interserve said it had established new banking facilities taking the group鈥檚 debt facility to 拢573 to cover all its existing and future commitments and estimates that its average net debt this year will increase to 拢450m due to the impact of cash outflow from the EfW contracts.
Last year Interserve saw its net debt climb to 拢390m and the annoucment that its chief executive Adrian Ringrose is to step down once a successor has been found.
Meanwhile, the Environment Agency (EA) announced on Friday that Interserve Construction had been fined 拢54,000 after an incident in which silt-laden water was discharged into a tributary of the River Rother in East Sussex.
The firm admitted responsibility for the breach, which happened while it had been working on a contract to deliver improved capacity at South East Water鈥檚 Crowhurst Bridge Water Treatment Works.
The EA said it took such incidents 鈥渧ery seriously鈥� but accepted that there was no evidence local wildlife was adversely affected.
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