Laing O’Rourke has confirmed the current scale of its losses on an ill-fated PFI hospital job in Canada.
The figures are contained in the firm’s annual report for the year to March 31 2016 which has now been made public.
And it highlights the huge write-downs on O’Rourke’s joint venture with Spanish contractor Obrascón Huarte Lain on the Montreal project.
The report states: “Profit after tax from joint venture companies fell from a profit of £1.2 million in 2015 to a £86.8 million loss, due entirely to a £93.1 million write-down of a major construction joint venture in Canada.
“The write-down in this contract was due to additional costs due to programme slippage including damages payable after the original substantial completion date was not achieved.
“The client and the joint venture project team have now agreed to target substantial completion in the last quarter of the year ending 31 March 2017.
“Whilst the scale and complexity of this contract means the position is not without risk, management believe project progress together with recent alignment of programme with the
client significantly de-risks the company from further material slippage.”
Further details in the report show O’Rourke racked-up exceptional costs of £43.3m during the year for redesign work on three Design for Manufacture and Assembly (DfMA) construction contracts in the UK.
from Construction Enquirer http://www.constructionenquirer.com/2017/01/30/hospital-delays-cost-laing-orourke-93m/
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