The £745m project was achieved operational completion in February 2019, after one of the three original joint venture partners, Carillion, had gone out of business.
The fixed-price road building job was one of three major UK loss-makers for Carillion that were blamed by its directors for the company’s collapse two years ago.
Both Balfour Beatty and Galliford Try said on 23rd December 2019 that they expected to receive a cash payment of around £32m each under the terms of the settlement.
Galliford Try said that it would incur a write-off of £52m as a result.
It added: “The settlement brings to a conclusion a complex and challenging project, averting a lengthy and costly litigation process. The settlement also removes a significant distraction and uncertainty, allowing the Construction business to focus on its core business, current and new projects which are expected to deliver improving margins, operating on multiple secured frameworks and in our chosen sectors.
“Taken together with an adverse adjudication award on an unrelated historical contract in the period, the [Galliford Try] group will report an exceptional write-off of circa £61m at 31st December 2019.”
Balfour Beatty, by contrast, said that it “continues to expect profit from operations for the year ended 31st December 2019 to be in line with the trading update provided on 12th December 2019.” That means an operating profit broadly similar to 2018’s £205m on revenue up 5% on 2018’s £7.8bn.
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