Costain is expecting to make a payment of £53.5m to National Grid in January, following a dispute over a troubled gas compressor project.
Costain reached an agreement to terminate and settle its contract with National Grid on the Peterborough & Huntington gas compressor in June 2020, following a change in scope on the project.
The agreement included a legal process, through adjudications, to agree up to £80m of compensation, recover costs to date and eliminate a potential liability to National Grid for completing the works.
Costain said it has now received several adjudication decisions, the most recent of which was received on 10 December 2021. In this claim, the adjudicator found in Costain’s favour in respect of three out of four compensation events.
Costain said: “Under the terms of the termination agreement with National Grid, there is an expected requirement to make a payment of £53.5m in January 2022, which now represents the maximum cash outflow under the contract. Given the recent adjudication decision, we have an entitlement to recover a proportion of this payment and will be discussing the timing and amount with National Grid.
“The payment, if made, will not affect our banking arrangements and we will continue to have a strong balance sheet that enables us to deliver our business plan.”
