Outsourcer Interserve (IRV) has been sacked by customer Viridor from a £154m energy-from-waste construction project.
Viridor Capital Projects Director Alan Cummings says the contractor 'continually and repeatedly failed to meet delivery milestones' according to a report in Construction Enquirer.
Interserve today issued a statement saying it was consulting with legal advisers and would update investors further 'in due course'.
EMBARRASSING LOSS
News of the embarrassing contract failure comes just one day after chief executive Adrian Ringrose stepped down from the top job at Interserve.
In August, Ringrose said he would manage an exit from the company's troubled energy from waste contracts after already booking a £70m loss on the projects.
Problems included issues with design, procurement and installation of the gasification plant, as well as supply chain challenges resulting in delays.
Media reports indicate some of Interserve's suppliers for the project went into insolvency, hindering its ability to deliver on commitments to waste management specialist Viridor.
CASH COLLECTION ISSUES
As well as Ringrose's departure, Interserve also said it faced changing payment terms on some of its contracts in the UK. It was working to balance cash strains in the UK with better management of working capital in international businesses.
But Interserve could be struggling in its international construction and equipment hire businesses too, according to analyst Joe Brent at investment bank Liberum.
Brent raised concerns over Interserve's division in the Middle East citing local industry reports of a potential a 15% contraction in construction output this year.
Shares in Interserve trade 3.5% lower at 357p.
