Ongoing problems at Tube maintenance company hit stakeholders Atkins and Balfour Beatty
Atkins will take a £36m hit in its full-year results due to ongoing problems at Metronet, the consultant revealed today.
Atkins said that the costs of delivering Metronet’s capital programme were expected to be “greater than originally anticipated.” Atkins said that the performance of Metronet, in which it has a 20% stake, had been “variable” during the second half of the year.
Atkins’ comments were supported by its Metronet joint venture partner Balfour Beatty, which issued a separate statement saying that Metronet’s finances were under increasing pressure due to higher costs. Balfour Beatty said that the likelihood of an extraordinary review to establish who should be liable for the costs had increased significantly.
Metronet, whose other stakeholders are Bombardier, EDF Energy and Thames Water, is currently in talks with London Underground over the responsibility for costs, which are estimated to overrun by about £750m by 2010. The parties are also considering scaling down some of the projects outlined in the 30-year project.
The consortium has come under increasing fire from regulators, London Underground, and London Mayor Ken Livingstone over delays and cost overruns.
Atkins said that before the £36m exceptional loss, its pre-tax profit would be significantly ahead of expectations. Despite news of the Metronet hit, Atkins’ share price rose 66.5p, or 6.6%, to 1070p this morning.