Insituform Technologies Inc., the U.S. based contractor that includes Affholder amongst its subdivisions, has posted a 4Q 2004 loss of $6.6M, which it said primarily reflected losses in its tunnelling business.
A comprehensive project by project review of all the work in the tunnelling field led to the expected margins on its tunnel projects being revised. Insituform said the losses “primarily stem from a significant adverse gross margin adjustment on one large tunnelling project in Chicago”. A representative declined to comment when contacted by T&TI about which job, but Affholder is working on the Chicago TARP scheme (T&TI, April 2004, p11).
Total adjustment was $7.3M during 4Q 2004 and $11M for the year ended 31 December 2004. The company attributed the differences to additional labour requirements, problems with concrete finishing works and inflated material costs, mainly concrete and steel prices. It added that the project had been on target until the later stages.
Other tunnelling contracts were said to have experienced unexpected job costs, again due to higher than expected materials, plus labour productivity issues. Site conditions also increased costs on some projects, but these may bring about claims that will benefit future financial reporting periods. The company said it “expects to continue to work through issues in the tunnelling business”.
