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Sat February 27 2021

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Costain settles A465 contract dispute

17 Feb Costain has finally settled its dispute with the Welsh government over its costs on the A465 Heads of the Valleys road contract.

Costain has built Pont Jack Williams over the A465 in Brynmawr as part of the scheme
Costain has built Pont Jack Williams over the A465 in Brynmawr as part of the scheme

It has still not yet finished construction though.

Costain is widening 8km of the A465 between the Glanbaiden junction at Gilwern and the Brynmawr roundabout, on the fringe of the Brecon Beacons National Park. Construction started at the end of 2014 and was supposed to have finished in September 2018.

The works have included the construction of over 10,000 metres of retaining walls and installation of over 14,000 soil nails, which has thrown up some unforeseen technical challenges.

Five months ago Costain said that it would have the job finished by this spring, two and a half years late. Today it said that the remaining works would be completed in September 2021 – three years late. The initial contract price was £159.5m but costs have spiralled beyond £336m.

Costain said that the financial terms of its settlement with the Welsh government are in line with the provision made in its end-of-year 2020 accounts,  which are not published until next month.

However, Costain took a £45.4m charge for the A465 Heads of the Valleys contract in its accounts for the first half of 2020 after an arbitration hearing went against the contractor.

Costain said today: “As a result of the settlement, the company has certainty of the final account sum payable by the Welsh government to the company, including further milestone payments.”

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MPU
MPU

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