Soaring costs at London incinerator job force M&E rethink

The Energy Recovery Facility forms part of the wider North London Heat and Power Project in Edmonton where costs have soared from £1.2bn to £1.5bn, due to construction material and wage inflation.

The EFR project is now at a critical stage with steelworks due to start shortly and main M&E works to follow.

But supply chain problems have forced Acciona to rethink its procurement strategy for the critical M&E stage of works.

Client body, the North London Waste Authority, representing seven councils, has revealed that the project originally due to be commissioned in 2025 will now be completed in 2027.

While civils works have proceeded well, officials from NWLA are concerned the M&E phase works could hit out-turn costs further.

The programme director for NWLA revealed Acciona has faced problem securing and mobilising subcontractors for the mechanical and electrical sections of the ERF build.

He added that the contractor was reviewing its approach to packaging tasks, to respond to feedback from potential subcontractors. The NWLA is now demanding a ‘realistic schedule and delivery plan.’

He said: “Acciona have identified issues in their delivery of the next stages of the design, procurement, and construction of the ERF facility, namely the mechanical and electrical sections of the build, in what is a challenging period for the construction industry.

“Officers are in regular discussions with Acciona to understand both how on-site momentum can be restored and how future delays can be minimised.

“Acciona are considering as part of this revising their approach to packaging work to generate increased interest from the potential supply chain.”

He added: “Our contract with Acciona provides that delays in the programme are their risk, and they may be liable to pay damages if the new facility is not delivered on time.

“However, it is not in the Authority’s interest to be working with a contractor facing significant financial challenges.”

The value of work completed so far has hit £790m with a Resource Recovery Facility to receive and transfer  waste and EcoPark House visitor centre completed on budget.

The remaining cost to complete is forecast at £730m.

The programme director said: “Until officers are satisfied of the robustness of Acciona’ s schedule and delivery plan, caution must be applied to the certainty of the costs and contingency, although the figures above represent current best estimates.”