Interserve faces sack after Viridor gasification delay

Interserve, the construction firm working on a new gasification plant in Glasgow, has been served a notice of termination to its contract with operator Viridor, meaning the plant is facing serious delays.

Interserve faces sack after Viridor gasification delay
Viridor's GRREC facility is unlikely to hit its March 2017 operation date after delays
Interserve is the main contractor involved in the Glasgow Recycling and Renewable Energy Centre project (GRREC), and is facing a termination of its contract three years into the build, after Viridor said the company had “continually and repeatedly failed to meet delivery milestones”.

Construction on the £124-million project began in 2013 and the facility was meant to begin operating this year, processing 200,000 tonnes of residual waste collected by Glasgow City Council every year to produce enough energy to power the equivalent of 22,000 homes.

However, it is believed Interserve is no longer expected to be able to meet a March 2017 completion date, leading to the termination notice being served, with Interserve preparing to take employees off site. Although the plant is part of a deal with Glasgow City Council, it is believed there will be no damage to the public purse. However, it is unclear by how long completion will be delayed.

The move comes as it emerges Interserve’s Chief Executive Adrian Ringrose is to step down from his role next year, as the company warned that “significant risks” from the troubled waste contract remain.

Interserve had announced in August that it is leaving the energy-from-waste (EfW) industry months after revealing complications with on-going projects had cost the company £70 million.

An interim management report issued by the firm in August stated that positives in the company’s first half results for 2016 had been ‘overshadowed’ by the deterioration in outlook on its six EfW contracts and that the ‘unique challenges’ of the market had led to the decision to leave it.

In May, the firm confirmed that design, procurement and installation issues at Viridor’s planned gasification plant in Glasgow had prompted a £70-million contract provision being imposed on the company. The firm stated in a trading update for the first four months of the year that those issues coupled with ‘continuing challenges with the supply chain’ would result in further cost overruns and delays to the project.

Both Interserve and Viridor are now understood to be talking to advisers about their legal options.

A troubled gasification business

The UK Without Incineration Network (UKWIN), a national network of around 100 campaign groups opposing incineration, warned investors of the risk that gasification projects present with a briefing highlighting more than a dozen failed projects in recent years.

The UKWIN briefing provided information on gasification and pyrolysis projects and companies, stating: ‘Promoters of gasification and pyrolysis schemes… regularly make bold claims about the technological, environmental and financial performance of their proposed facilities with a mixed waste feedstock. In reality, where such configurations have been attempted they have either failed to live up to these claims or operators remain suspiciously quiet about reporting actual performance.’

The seven-page document goes on to explain: ‘Gasification and pyrolysis constitute some of the riskiest technologies in the waste industry and are synonymous with bankruptcies, failures and broken promises. This perception is well deserved, with the lack of examples of success starkly contrasting with a litany of failures.’

Shlomo Dowen, National Coordinator of UKWIN, commented: “Gasification and pyrolysis is an expensive misstep when it comes to waste management, because even if someone ever manages to get the ill-fated technology to work it would still have all of the problems of more conventional waste incineration… resulting in shocking levels of CO2 being released and relying upon destroying valuable material that should be recycled, composted or reused.”

An in-depth look at the development of gasification and pyrolysis technology and what its future may hold can be found in the next issue of Resource, out later this month.

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