Multiplex is auditing the accounts of electrical subcontractor Phoenix Electrical in a row over payment problems on the Wembley project.
This comes a week after labour agency BMS, which provided Phoenix with 250 electricians, quit the project after alleged financial difficulties with the subcontractor.
It is understood that Multiplex has now served Phoenix with a seven-day notice to replace the workers before Multiplex steps in to hire a fresh workforce. If this occurred it could effectively end the subcontractor's role on the project.
Phoenix has been placed under increasing financial pressure as a result of its involvement in Wembley, and has been granted financial assistance by Multiplex. It is understood that Multiplex began the audit to discover where the money had gone after becoming concerned that, despite assistances, Phoenix was apparently unable to pay BMS. A source close to the dispute said: "Under the supplemental agreement, Multiplex is entitled to audit the accounts of its subcontractors. It wants transparency."
A senior site source said: "I can't see how Phoenix can continue on the project. If they do, they are in danger of building up liquidated damages that could have serious implications for the rest of the business."
Multiplex is entitled to audit the accounts of its subcontractors
Source close to the dispute
It is understood that Multiplex has given Phoenix a deadline of Tuesday to replace BMS, which was due to carry out crucial testing work, or Multiplex will employ workers on its behalf. If that happens, it could signal the end for Phoenix on the project. Multiplex would also theoretically be able to claim money back from Phoenix.
A Multiplex spokesperson said: "Discussions between Multiplex and Phoenix are ongoing. We have told Phoenix that we expect continuity of work."
Phoenix Electrical declined to comment.