Biogas debacle costs Interserve another £100m

Shares in Interserve tanked 25% today after the support services firm drastically underestimated the cost of its failed energy-from-waste project by almost £100 million.

After a series of embarrassing and technical problems with a project in Glasgow, Interserve decided to stop building plants to generate biogas from rubbish which would otherwise be used as landfill. It estimated this move would cost £70 million.

But now the firm, which has 80,000 employees, has dug deeper and today admitted the costs are much worse than that — it’s writing down £160 million.

The support services firm — whose work stretches from domestic care to building work at Sandhurst military academy — faced major extra expenses and delays to a flagship waste-to-energy plant in Glasgow that it was contracted to build on behalf of recycling specialist Viridor.

Interserve was dismissed from that job — it today said it still expects “a lengthy period of litigation” over its sacking — and then quit another six waste-to-energy contracts with revenues worth more than £400 million. Shares today fell 81.5p to 254.1p.