Costain settles A465 road contract dispute

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Costain has agreed on a settlement with the Welsh Government to added costs on its A465 road contract

Costain and the Welsh Government have been in dispute over a retaining wall on the A465 road, which has forced work to be delayed by around two years.

Costain revealed the financial terms of the settlement were in line with a £45m provision made by the group within its half-year interim results.

‘Committed to remaining works’

Costain said: “As a result of the settlement, the company has certainty of the final account sum payable by the Welsh Government to the company, including further milestone payments.

“Work on the contract is nearing completion, and the company continues to be responsible for the delivery and the management of associated project risks for the remaining works, which are scheduled to be completed in September 2021.”

Costain entered into the A465 road contract in 2015. The A465 section 2 is an 8km stretch of road between Gilwern and Brynmawr. It involves building on a steep-sided valley – the Clydach Gorge – and passes through the Brecon Beacons National Park.

The project has been plagued with increased costs and time delays.

In December 2019, an arbitration award split the responsibility for the design information between both parties.

Costain reduced its profit forecast for the year following the legal defeat from the Welsh Government.

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