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Mon February 17 2020

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Viridor-Interserve dispute moves to arbitration

26 Nov 19 Waste management company Viridor has issued arbitration proceedings to reclaim £72m from construction contractor Interserve for cost overruns on its Glasgow waste-to-energy plant.

The Glasgow Recycling & Renewable Energy Centre at Polmadie
The Glasgow Recycling & Renewable Energy Centre at Polmadie

In July 2012 Interserve was appointed by Viridor as the EPC contractor for the construction of the Glasgow Recycling & Renewable Energy Centre (GRREC).

Interserve was supposed to complete its £146m contract for Viridor in March 2016, after a three-year programme, but subsequently acknowledged it would not be able to meet a revised completion date of March 2017. At which point Viridor threw it off the job and brought in Doosan Babcock to finish it.

The costs to Viridor of rectifying and completing Interserve’s work exceeded its expectations. Viridor says that it is “contractually entitled” to recover the incremental costs from Interserve Construction Limited. 

Viridor parent company Pennon said today: “We have now issued arbitration proceedings to progress legal recovery of the debt. The gross receivable of £72m continues to be recognised and having again considered the assessment of the Interserve credit risk, the cumulative provision of £28.7m remains unchanged from the position at 31st March 2019.”

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