Vinci has lost an £80m contract to build an energy-from-waste plant in Guernsey after the island’s council pulled the plug because of its high cost

The French contractor had been preferred bidder on the job along with local subcontractor JW Rihoy, funded by the States of Guernsey and operator Suez Environment.

The two sides had got as far as agreeing a letter of intent, but the council then scrapped the project, which was expected to handle 45,000 tonnes of rubbish a year.

A spokesperson for the States of Guernsey said: “The project should have been self-funding; we would have recouped money through gate fees.

The authority is now expected to honour the terms of the letter of intent, which guarantees 4% of the overall project cost to the contractor.

This is the second time the States of Guernsey has aborted an energy-from-waste facility. In 2003, German-based Lurgi UK was awarded a £72m contract to build a plant, but the idea was abandoned in 2005.