Interserve

Purple_Flash

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Is it bad management or more of a sign that public sector contracts need a overhaul ?
 
yet the MOD awarded a 12 year contract for fire cover to a company that government put at risk of going under
I wonder why they would do that, Interserve will be selling off their "non core" business so it could work out well in the end.:D
 
I wonder why they would do that, Interserve will be selling off their "non core" business so it could work out well in the end.:D
its not going to plan the losing bidder has contested the award and may go to court as yet, may even go the way of the SAR balls up yet, MOD has only been trying to sell off fire cover since about 1985.
 
Is it bad management or more of a sign that public sector contracts need a overhaul ?
Both.

The management can't cope with the diversity of the business, IT systems are pretty crap and there have been problems in integrating the business streams into the corporate whole. Energy from waste business has bombed.

They threw a lot of capital financed by debt into WfE and massively underestimated the difficulties in a/ the practical engineering of the plants and b/ the kick-back from the environmental lobby who are against burning anything for energy.

Interserve have 6 large contracts including Glasgow, Derby, Margam, Templeborough and Dunbar. The Glasgow one was built for Viridor who look after Glasgow's waste disposal, but the project is way behind timescale and £95M over budget. IIRC Interserve have been removed from the project and replaced by Doosan Babcock.

The Glasgow plant is a gasification process and there have evidently been numerous engineering issues on the plant. Last figure i saw was £430M with a single £126M charge on the Glasgow plant.
 
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Most of the private sector has been giving them a swerve for the last 2-3 years. They can't get an account it's pod, or cash up front.
 
From what I've seen and heard, Interserve's outsourcing facilities management business is fairly solid, it's the failure of the WfE business that has really damaged the finances.
 

MrBane

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Slightly off topic, but one fun way to pass a few minutes is to pop on lse.co.uk and look for the days biggest fallers and then check out their forum.

So many salty tears..:D
 
Interserve. Bunch of over-reaching, contract hungry, price cutting, incompetently managed, subbie bashing twats. Don’t owe me a penny despite their best efforts.
 

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Slightly off topic, but one fun way to pass a few minutes is to pop on lse.co.uk and look for the days biggest fallers and then check out their forum.

So many salty tears..:D
Out of morbid curiosity had a look at their Q3 results announcement.

Curious mixture of hubris and ill concealed desperation.

But it's all going in line with management expectation: EfW continues to be a drain, debt levels increasing, Middle East receivables (aka they won't cough up) increasing, considering selling off non core businesses and trying to raise fresh capital.

That would be on top of the £300m they raised in March then.
 
Just my little insight:
Interserve, Carillion, Mitie, McAlpine- As a young surveyor working for corporate (I was employed in house client side looking after their premises) I dealt with these companies and a few others when they just did cleaning or boiler maintenance or small maintenance work - they were all hungry and expanding with the "we can add value, if you want automatic doors maintained we can do that..and clients pushing for one-stop facilities management and added value.) The facility provider would then recruit and try to do that or they would buy a company to do it for them. Rapid expansion, poor management and no effective controls down the food chain. Supervisors became managers, managers became directors as they were over-propmted. It seemed overnight that these companies were providing all the facilities services required and then strangling the client over costs and performance. The "in-house" staff were TUPE'd over and had new unforms. Suddenly all support staff were wearing uniforms with Mitie, Carillion, McAlpine or whatever logos. And now it's too top heavy, too large and falling apart. The result is a reversion to small specialist providers who I am sure will expand and offer to take on more as clients request "added value" and so the circle revolves....
 
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Pretty much sums up all outsourcing companies, but equally the naivety of the companies giving them contracts.

SWMBO worked for local government who outsourced all maintenance to GDF Suez. This resulted in a cost of £89 to change a single lightbulb in an interview room (no windows) ad the cost of the bulb? £0.59.

GDF classified this as a "call out" under their contract and therefore put an immediate minimum charge of £60 on. And yes, they really did try to charge £29 for changing a light bulb as "non-routine maintenance".

SWMBO's team being horrified at the cost, sent someone out to B&Q at lunchtime (round the corner from the office), shoved a table into the middle of the room and did the job for £0.59 out of petty cash.
 
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Pretty much sums up all outsourcing companies, but equally the naivety of the companies giving them contracts.

SWMBO worked for local government who outsourced all maintenance to GDF Suez. This resulted in a cost of £79 to change a single lightbulb in an interview room (no windows) ad the cost of the bulb? £0.59.

GDF classified this as a "call out" under their contract and therefore put an immediate minimum charge of £60 on. And yes, they really did try to charge £29 for changing a light buld as "non-routine maintenance".

SWMBO's team being horrified at the cost, sent someone out to B&Q at lunchtime (round the corner from the office), shoved a table into the middle of the room and did the job for £0.59 out of petty cash.
£60.00 + £29.00 = ?
 

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