A company formed to build a £32m PFI waste treatment centre in South Wales has gone into administration, which has led to predictions of a wave of subsequent legal action from interested parties.

Project firm HLC (Neath Talbot) went into administration last month, leaving debts of around £40m, according to local reports. The firm was part of Portuguese engineering and project management firm Grupo HLC. A separate company charged with the running of the centre, HLC Waste Management, which employs a workforce of 90, remains fully operational.

The client for the project, Neath Port Talbot County Borough Council, confirmed that it had given notice to terminate the PFI deal with HLC (Neath Talbot) to the firm on 19 August and that this would formally take place on 21 September. A council spokesperson said the decision was made due to the contract never reaching "service commencement”. “The contract did not get going with the timescale agreed. It did not meet the specification,” the spokesperson said.

Sources claim that a network of companies involved in the construction of the scheme, are all owed money. A source said: “There’s a battle of the bonds on the horizon.” The centre was built by contractor Birse, which is not believed to be owed any money.

The administration follows a troubled history for the project, which HLC first signed in 2000. The scheme was completed in 2002 but suffered a fire a year later. The last published results for HLC (Neath Port Talbot) showed the firm had accumulated losses of £7.5m up to 31 December 2003.

Source

QS News