Ferrovial losses deepen on Scottish M8 project

Aaron Morby 9 months ago
Share

Spanish contractor Ferrovial has had to pump £25m into its UK infrastructure business after suffering major losses on the M8 improvement project in Scotland.

M8 opened in April but snagging work continued to September

Ferrovial Agroman UK said its total provision for losses on the motorway job had risen from £14m at the end of 2016 to £29m after increased labour costs to meet the opening deadline this year.

The latest provisions follow a £25m loss on the M8 improvement scheme in 2015.

Ferrovial carried out the £500m M8 M73 M74 Motorway Improvements Project in joint venture with Lagan Construction Group. Much of the project opened on time in the Spring although snagging works continued into September.

In accounts for 2016, the firm said the motorway scheme plunged Ferrovial Agroman UK into a second consecutive year in the red with losses of £12m (2015: loss £13m).

But work in London on the Thames Tideway project and the Northern Line Extension with JV partner Laing O’Rourke helped revenue to rise nearly 40% to £364m.

The firm warned that the M8 contract had proved difficult to forecast because of issues with design, the complexities of working on a brownfield site and the shortage of labour and materials.

It said: “As a result there is significant uncertainty in estimating the costs to come, the future operational performance and the degree to which certain cost overspends can be recovered from third parties.

“Management believe that is the possible outcome of the assumptions made regarding areas of significant uncertainty could require material adjustment in subsequent financial year.”

Jose Vicente Melchor Gonzalez said: “Partially offsetting losses on road projects, other projects had performed to expectations generating the margins anticipated at their respective stages of completion.”

The losses come after another Ferrovial parent group owned company Amey announced losses of £93m last year, mainly from problems at the highways arm.

Latest news

Police conduct three Grenfell interviews under caution

Investigation moves to a new phase following year of forensic work
9 hours ago

Surge in orders to see Robertson turnover top £700m

Contractor to report 25% increase in work as it is now live on 237 sites
3 hours ago

MPs slam building inspection and materials testing regimes

Construction under fire for "conflicts of interest that are pervasive throughout the industry"
16 hours ago

Race starts for £75m portable modular homes deal

London borough launches initiative to move homes from site-to-site
11 hours ago

London council scraps £2bn Lendlease deal

Haringey rips-up agreement with developer to build 6,400 new homes
18 hours ago

Crane driver breaks back on Balfour Channel Tunnel site

Accident during £120m contract to install electricity cable between Great Britain and France
1 day ago

Bid race takes-off for London City airport terminal

Key main terminal expansion substructure and concrete works up for grabs
1 day ago

Kier fined £600,000 after concrete block hits worker

Court hears how lack of supervision led to accident on rail bridge site
1 day ago

Graham wins £90m Congleton link road

Project includes a 85m bridge over the River Dane
2 days ago

SES lands £20m M&E deal at soft drinks bottling plant

Work to start this month powering major extension to Rugby factory
18 hours ago

Suppliers unable to contact demolition giant Cuddy Group

Calls to head office going unanswered
2 days ago

Over 1,000 staff still stranded at Carillion

Official Receiver investigators are sifting through 6bn rows of data
2 days ago

Balfour set for £60m Strathclyde Uni teaching hub

Firm lined up for first major job in £650m building programme
2 days ago

Boost your online presence – join the new Enquirer Directory

New site for suppliers and buyers will showcase their products, services and latest stories
3 months ago

60 jobs axed as Somerset building contractor sinks

Long-established R G Spiller enters administration
2 days ago

Nine in 10 councils breaking prompt payment rules

Findings emerge on six month anniversary of collapse of Carillion
2 days ago

Roadworks speed limit could be raised to 60mph

Motorway trials to test different limits through highways sites
2 days ago

McLaughlin & Harvey lands £50m Liverpool training centre

Construction to start in October on new academy
2 days ago

Plans in for final phase of £1bn Chelsea Barracks scheme

Last phase includes 126 affordable homes, and separate sports and medical centres
3 days ago

Joiners injured in temporary access platform collapse

Court hears how two workers plunged seven metres through unsafe platforms at hospital site
3 days ago

Green light for £50m Portsmouth Uni sports centre

Sports hub is the first project in a £400m University upgrade plan
3 days ago

Wates wins £161.5m Wembley resi blocks deal from Quintain

Latest deal is Wates largest ever award on a single site
6 days ago

Construction’s most considerate contractors win ultra site awards

Latest initiative rewards highest industry site standards and supply chain collaboration
3 days ago

Go-ahead for 37-storey Leeds student tower

Work to start before the end of this year on landmark student tower
6 days ago

Construction degrees come under fire from students

Students claim courses fail to prepare them for life in the industry
6 days ago

McAlpine to start £30m Manchester biomedical hub

Work to start in September on Citylabs 2.0 building project
6 days ago

Roofer in six metre plunge on to solid concrete floor

Court hears how worker suffered multiple fractures after plunge on refurbishment job
6 days ago

Cost of industry skills cards set to rise in September

CSCS leaders confirm 20% price rise per card to £36
7 days ago

£300m Bristol Uni campus approved

Work due to start on Temple Quarter Enterprise Campus early next year
6 days ago

Crossrail’s Sir Terry Morgan to lead HS2

Morgan replaces David Higgins as HS2 chairman next month
6 days ago

Contractor services