Costain Group PLC Update on the A465 contract (8817X)
2020年9月3日 - 3:00PM
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RNS Number : 8817X
Costain Group PLC
03 September 2020
Costain Group PLC
("Costain" or "the Group" or "the Company")
Update on the A465 contract
3 September 2020
Further to the announcement on 17 August 2020, Costain received
yesterday the latest arbitration decision in relation to the
Group's contract with the Welsh Government for the construction of
the A465 Heads of the Valley road which was entered into in 2015
(the "Contract").
As previously announced, the Welsh Government had escalated a
specific matter under the dispute resolution mechanism in the
Contract relating to the responsibility for design information for
a specific retaining wall and whether it qualified as a
compensation event. This issue was decided in the Company's favour
by way of previous adjudication awards. However, 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. 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 in ongoing discussions with the Welsh Government to
reach agreement on a final financial settlement and to seek
recovery of costs under the Contract. However, on the basis of the
uncertainty of recovery of such costs following yesterday's
arbitration award, and subject to reaching a final settlement, the
Group's half year results for the period to 30 June 2020 will
include a charge to the income statement of c.GBP45 million to
adjust the revenue recognised based on the level of cash received
to date under the Contract. Costain will continue to fulfil the
Company's obligations under the Contract, with completion scheduled
in 2021.
The Group will announce its half year results on 14 September
2020, as scheduled.
This announcement contains inside information.
The person who arranged for the release of this announcement on
behalf of the Company was Tony Bickerstaff, Chief Financial
Officer.
Enquiries:
Costain Tel: 01628 842 444
Alex Vaughan , Chief Executive Officer
Tony Bickerstaff, Chief Financial Officer
Carolyn Rich, Investor Relations Director
Sara Lipscombe, Group Communications
Director
MHP Communications Tel: 020 3128 8658
Tim Rowntree Costain@mhpc.com
Peter Hewer
Robert Collett-Creedy
Notes to Editors
Costain helps to improve people's lives with integrated, leading
edge, smart infrastructure solutions across the UK's
transportation, water, energy and defence markets. We help our
clients improve their business performance by increasing capacity,
improving customer service, safeguarding security, enhancing
resilience, decarbonising and delivering increased efficiency. Our
vision is to be the UK's leading smart infrastructure solutions
company. We will achieve this by focusing on blue chip clients
whose major spending plans are underpinned by strategic national
needs, regulatory commitments, legislation or essential performance
requirements. We offer our clients leading edge solutions that are
digitally optimised through the following five services which cover
the whole lifecycle of their assets: future-shaping strategic
consultancy; consultancy and advisory; digital technology
solutions; asset optimisation and complex programme delivery. Our
culture and values underpin everything we do.
For more information visit www.costain.com
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