Costain warns £22m at risk on incinerator job

Aaron Morby 14 years ago
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Costain has warned full payment of a £120m subcontract on the Belvedere energy-from-waste facility in London is hanging in the balance after its Austrian client’s parent company entered administration.

The firm is engaged as a subcontractor on the project for AE&E Inova, ultimately owned by the Austrian AE&E Group which has just filed insolvency proceedings.

Costain said that it was owed £22m for work in progress and milestone payments not yet certified on the subcontract job, which is now approaching completion.

The £350m Belvedere energy-from-waste plant is being built for Cory Environmental in Bexley, south east London.

This morning Costain issued a Stock Market statement that said: “Costain has sought assurances from AE&E Inova that they will make all future payments due under the contract. However, Costain considers that there can be no certainty that such assurances can be obtained.”

“In light of the insolvency of AE&E Group GmbH, Costain is engaged in active discussions with both AE&E Inova and Cory Environmental regarding the financing and completion of the project.”

The next stage payment, for £2.6m, is due by 10 December and AE&E Inova has confirmed that it intends to make the payment.

The plant will handle waste from the Western Riverside Waste Authority, representing the London boroughs of Hammersmith and Fulham, Lambeth, Wandsworth and the Royal borough of Kensington and Chelsea.

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