The completion of Renewi’s £145m energy-from-waste (EfW) plant in Derby could be delayed by up to a year following the insolvency of one of the contractor’s key suppliers.
Renewi’s partner on the project, Interserve, has been coping with the failure of EfW technology supplier Energos in July 2016. In its annual report on 25 May, Renewi said the scheme had experienced a “number of major challenges” as a result.
The mechanical biological treatment (MBT) facility in Derby may now not be fully operational until 2018, despite its original completion date being set for March 2017.
In 2014, Interserve signed a £950m public-private partnership contract to build and operate the facility as part of a joint venture with Shanks, which became Renewi after a merger with continental waste firm Van Gansewinkel last year.
Energos was Interserve’s main technology supplier on a number of its EfW sites, including Derby and Viridor’s plant in Glasgow.
Renewi said Interserve was working to implement a recovery plan for Derby, and many aspects of the construction were on time and on budget. But it did not expect the plant to be operational until late in the financial year ending April 2018.
The report also revealed that the financial implications for Renewi had amounted to a total of £3.4m, with the company being hit with £1.7m in liquidated damages and a further £1.7m of exceptional costs.
In August 2016 Interserve announced moves to exit the EfW market after problem contracts forced it into a £34m half-year loss.
Then in February this year the firm revealed that the costs of exiting the sector had ballooned to £160m. The lion’s share was attributed to Interserve’s contract with Viridor on the Glasgow facility.
The contractor had been served with a termination notice from the client in November 2016 after it claimed that Interserve had “continually and repeatedly failed to meet delivery milestones”. In February Doosan Babcock took over Interserve’s Glasgow contract.
Interserve declined to comment.
- A version of this article first appeared on the website of our sister title Construction News