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Viridor to lose £95m on its Glasgow EfW project

viridor glasgow ef w

Viridor has estimated that expenditure on its Glasgow energy-from-waste (EfW) facility will go £95m over budget, as the company announced it is trying to claw back costs incurred through delays caused by construction firm Interserve.

Interserve was removed as the contractor on Viridor’s Glasgow Recycling and Renewable Energy Centre (RECC) in November 2016 after it “continually and repeatedly failed to meet delivery milestones”.

RECC, which is being built to process around 350,000 tonnes of waste collected by Glasgow City Council, was initially meant to open in March 2016. Construction began in 2013.

In February 2017, Doosan Babcock was appointed to replace Interserve.

In a trading update, Viridor’s parent company Pennon said the facility was in final commissioning and that Viridor was entitled to recover “incremental costs” from Interserve.

It said: “Completion of the construction has required a somewhat higher level of remediation than previously anticipated following the need for contractor change. Overall expenditure is expected to be £95m higher than the original £155m target.

“Discussions with Interserve are ongoing with regard to the contractual settlement.”

Pennon added that profits during the lifespan of the 25-year contract could be “lower than expected”, depending on how discussions went.

The trading update also said Viridor expected lower profits due to the de facto ban on waste imports into China, but that “this is not expected to have a material impact on Pennon’s overall financial performance”.

Earlier this year, Viridor said it had stopped exports of plastic to China and that it had identified other Asian markets for the material.

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