Pennon Group has revealed the costs of Interserve's former energy-from-waste (EfW) project in Glasgow have risen by £95 million.

The company, which is owns developer Viridor, said it is in discussions with Interserve after costs soared well above the original £155m target to £250m.

In late 2016, Interserve was taken off the project and replaced by engineering group, Doosan Babcock.


In a trading statement, Pennon said: "The Glasgow ERF is in final commissioning. 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 £95 million higher than the original £155 million target. Viridor is contractually entitled to recover incremental costs from the original principal contractor, Interserve, under certain circumstances.

"Discussions with Interserve are ongoing with regard to the contractual settlement. Dependent upon the conclusion of those discussions, margins over the life of the project to 2043 could potentially be lower than originally expected, although we do not believe there is any immediate impact on earnings."

(LM)