New Wembley costs to rise by £75m

Caborn backs Wembley for deadline

New Wembley constructor Multiplex has announced that cost overruns are expected to rise to £75m.

It stated recent estimates of a £48.6m discrepancy between construction costs and revenues would have to be revised upwards by more than 50%.

The projected losses stem principally from the dispute with the steel sub-contractor Cleveland Bridge (CBUK), which left the site last year.

The redevelopment of the stadium was orginally set at £757m.

Steel contractor Hollandia, was called in to replace CBUK, but no agreement was reached on the upper limit of the cost of steel and labour to Multiplex.

Steel prices have been rising and it is believed that, if a fixed-price contract is not agreed, the overruns might rise beyond the £75m estimate.

"Whilst the negotiations are at an advanced stage they remain incomplete and it is possible Multiplex will not conclude a mutually acceptable agreement with Hollandia," chairman Allan McDonald told shareholders at the Australian company's annual meeting.

"If the negotiations are completed, the agreement will ensure that the costs in connection with its subcontract works package will be capped at a maximum value.

"If actual costs reached the maximum value this would result in an adverse impact of around £25m on the estimated steelwork costs."

However, McDonald said Multiplex would try to recover shortfalls in income through a series of "claims".

Legal action is already under way against CBUK.