Hard-pressed contractors hit back at Eurotunnel threats

Costain and Tarmac, both members of the Transmanche Link consortium that built the channel tunnel, hit out yesterday at threats of legal action from Eurotunnel. The tunnel operator is considering suing the construction companies, claiming that they failed to supply sufficiently reliable equipment.

Alan Lovell, who yesterday took over as chief executive of Costain, said that the claims made two weeks ago by Eurotunnel were unjustified and without foundation. Both he and Neville Simms, the chief executive of Tarmac, said that TML would vigorously respond to any claim, which is reported to amount to around pounds 1bn.

Mr Simms pointed out that the project was handed over by the contractors two years ago, after tests had been completed to the satisfaction of Eurotunnel and performance bonds had been returned. He added that the consortium members would "brush it aside in due course".

Yesterday's response from Costain and Tarmac followed last week's reply from Colin Parsons, chief executive of Taylor Woodrow, another TML member, who said Eurotunnel's threat was "a ridiculous way to finish a major infrastructure project."

TML is expected to counter-claim if Eurotunnel presses its case, details of which are yet to emerge. Eurotunnel's actions did not prevent Costain from releasing pounds 2.5m of the total pounds 20m provision it had previously made against the channel tunnel contract.

The continuing row between Eurotunnel and TML distracted attention from disappointing interim figures from both Tarmac and Costain, which both unveiled half-time losses, and from the demotion of Peter Costain, who moves from being chief executive to non-executive deputy chairman.

Mr Costain, who had been Costain's chief executive since 1980, has been the target of institutional investors, angered by a slump in the value of their investment in Costain and the staging by the company of two rights issues in recent years at prices well above the 69p at which the shares closed yesterday. The two cash calls raised pounds 160m to shore up Costain's balance sheet at prices equivalent to pounds 15.50 and pounds 3 a share. Since 1987, the shares have lost 98 per cent of their value.

Mr Lovell also poured cold water yesterday on rumours that Costain might be a bid target for Mohamed Abdulmohsin Kharafi, a Kuwaiti construction company that recently built up a 13.3 per cent stake in the company. He said that there had been no suggestion that it was their intention to mount a bid and he did not expect any such approach to be made.

At Tarmac, a pounds 15.9m interim loss compared with a pounds 23.1m profit in the first six months of 1994 but was distorted by a one-off goodwill write- off of pounds 45m following the disposal of a brick-manufacturing business to rival Ibstock.

Tarmac saw profits from its housebuilding operation, which it put up for sale earlier in the summer, plunge as house prices fell by 2 per cent and unit sales slipped by 8 per cent to 2,368. Profits of pounds 18.9m last year slumped to pounds 8.7m.

Delays in work from the private finance initiative hit the contracting arm, where profits slipped to pounds 2.9m (pounds 3.7m) from sales of pounds 451m. Only quarrying flourished, as price rises held firm, pushing profits up from pounds 14.2m to pounds 25.8m.

Costain, which reduced last year's loss from pounds 14m to pounds 10.4m, warned that trading continued to be extremely challenging but said its order book, up 11 per cent since the start of the year to pounds 529m, had proved resilient.

Comment, above

Investment column, page 24

News
news

Emergency call 'started off dumb, but got pretty serious'

Sport
Erik Lamela celebrates his goal
football

Argentinian scored 'rabona' wonder goal for Tottenham in Europa League – see it here

News
The cartoon produced by Bruce MacKinnon for the Halifax Chronicle-Herald on Thursday, showing the bronze soldiers of the war memorial in Ottawa welcoming Corporal Cirillo into their midst
news
News
peopleFox presenter gives her less than favourable view of women in politics
PROMOTED VIDEO
Voices
Funds raised from the sale of poppies help the members of the armed forces with financial difficulties
voicesLindsey German: The best way of protecting soldiers is to stop sending them into disastrous conflicts
News
The Edge and his wife, Morleigh Steinberg, at the Academy Awards in 2014
peopleGuitarist faces protests over plan to build mansions in Malibu
Property
One bedroom terraced house for sale, Richmond Avenue, Islington, London N1. On with Winkworths for £275,000.
property
Voices
Nigel Farage has backed DJ Mike Read's new Ukip song
voicesNigel Farage: Where is the Left’s outrage over the sexual abuse of girls in the North of England?
News
i100
Arts and Entertainment
Taylor Swift performs at the 2014 iHeart Radio Music Festival
musicReview: 1989's songs attempt to encapsulate dramatic emotional change in a few striking lines
News
Mario Balotelli has been accused of 'threateningly' telling a woman to stop photographing his Ferrari
peoplePolice investigate claim Balotelli acted 'threateningly' towards a woman photographing his Ferrari
Arts and Entertainment
Paul Anderson plays Arthur Shelby in Peaky Blinders series two
tvReview: Arthur Shelby Jr seems to be losing his mind as his younger brother lets him run riot in London
News
ebooksAn unforgettable anthology of contemporary reportage
Voices
Don’t try this at home: DIY has now fallen out of favour
voicesNick Harding, who never did know his awl from his elbow, is glad to see the back of it
Arts and Entertainment
Miranda Hart has called time on her award-winning BBC sitcom, Miranda
tv
Sport
Phil Jones (left) attempts to stop the progress of West Bromwich Albion’s James Morrison on Monday
Chelsea test can be the making of Jones and Rojo, writes Paul Scholes
Arts and Entertainment
Saw point: Bradley Cooper and Jennifer Lawrence in ‘Serena’
filmReview: Serena is a strangely dour and downbeat affair
Life and Style
The Zinger Double Down King, which is a bun-less burger released in Korea
food + drinkKFC unveils breadless meat beast
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

COO / Chief Operating Officer

Competitive (DOE): Guru Careers: A COO / Chief Operating Officer is needed to ...

SQL Developer with T-SQL, Watford, Hertfordshire - £350 - £360

£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...

Chief Financial Officer

120-150k: Accountancy Action: We are looking for an experienced CFO from a min...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker