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Interserve hit by Glasgow waste contract problems

Published: 10:43 06 May 2016 BST

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Interserve inked the £146mln contract with Viridor to undertake the EPC of the Glasgow recycling & renewable energy centre.

The outlook for its UK construction arm has been adversely hit by the state of a Glasgow waste contract, support services group Interserve (LON:IRV)  said on Friday, sending shares crashing.

Shares fell over 19% to 319p as the group said the issues related to the design, procurement and installation of the gasification plant, along with continuing challenges with the supply chain that will result in further cost overruns and delays.

"As a result the board anticipates a £70m exceptional contract provision to be taken in the first half of 2016, resulting in a similar level of cash outflow spread across 2016 and 2017.

"We will be pursuing every opportunity to mitigate this situation," the firm said.

Interserve inked the £146mln contract with Viridor to undertake the EPC of the Glasgow Recycling & Renewable Energy Centre.

Completion was originally scheduled for 2016.

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