Costain sets aside £45m after losing Welsh roads job ruling

The arbitrator's decision found that responsibility for the design information rests with Costain and, consequently, the additional costs associated with the building of the retaining wall is not a compensation event under the contract.

In a statement, the company said: “Costain is disappointed by the arbitration award which reverses the ruling of previous adjudication awards. The arbitration award, which determines a matter of principle only, and not quantum, is non-appealable.

“Although the arbitration award relates to the liability for the additional costs associated with the building of a specific retaining wall under the contract, it has implications for the responsibility for design information under the whole contract and therefore Costain's ability to recover these costs.”

Costain is still in discussions with the Welsh government in a bid to reach agreement on a final financial settlement for the roads job, and to seek recovery of costs under the contract.

But it said that in light of the new decision, it would include a £45m charge in its accounts.

The group will announce its half year results on 14 September 2020.