Interserve has today revealed that the cost of exiting its troubled Energy from Waste (EfW) projects has more than doubled to £160 million.

The contractor announced in May 2016 that it made £70m of provisions at its UK construction division as a result of a delayed waste to energy contract in Glasgow for client Viridor.

Contractual disputes on the development saw waste gasification specialist Energos fall into administration in July and by November, Interserve was served notice of termination on the project.

Interserve then announced it would quit the EfW sector after problem contracts in the sector forced it into a £34m half-year loss.

But now the firm has admitted the costs associated with the exited business have increased by £90m.

In a statement this morning prior to announcing its preliminary results at the end of the month, Interserve said that it had further considered the implications of the Glasgow scheme with its legal advisers and the expected lengthy period of litigation.

It added: “Alongside this exercise we have continued to undertake a detailed review of operational developments on the other contracts in our exited EfW business, including the impact of the entering into administration by our principal gasification subcontractor, Energos, together with the likelihood and timing of potential recoveries and claims from third parties.

“In the light of these developments and of the continuing uncertainties in relation to the final conclusion of our EfW contracts, the Board has concluded that the exceptional provision of £70m announced in May 2016 is no longer adequate to reflect the incurred and anticipated losses associated with this business.

“Consequently the Board has determined that it is appropriate to increase the exceptional provision for exiting this market and the associated contracts to £160m.

“We expect to complete substantially the construction and commissioning of the projects during 2017, although our contractual obligations in respect of warranties, and the resolution of claims will continue for a period thereafter. Further cash outflows of c£60m are expected during 2017 as the income statement charge is utilised.”

The latest revelations come as the Board searches for a new chief executive after Adrian Ringrose announced he was leaving to pursue the next phase of his career at the end of 2016.

Ringrose will continue at the helm until his replacement is found.