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LONDON-Multiplex has revealed that projected cost overruns on the construction of the Wembley stadium could need to be revised upward by at least 50% to euro 111 million ($132 million). At the firm’s annual general meeting of shareholders, chairman Allan McDonald warned that recent estimates of a euro 71.98-million ($86.07-million) gap between construction costs and revenues were being revised upward. Multiplex’s projected losses stemmed originally from its dispute with steel subcontractor Cleveland Bridge, which left the site in acrimonious circumstances last year.

But group spokespeople said that the latest overruns had been driven by a failure to reach an agreement with steel contractor Hollandia on the upper limit of the cost of steel and labor. Steel prices have been rising, and it is understood that, if a fixed-price contract is not agreed upon, the overruns may rise beyond the revised estimate of euro 111 million ($132 million) outlined yesterday.

While the negotiations are at an advanced stage they remain incomplete, and it is possible that “Multiplex will not conclude a mutually acceptable agreement with Hollandia,” said McDonald. He added that Multiplex would attempt to recover shortfalls in income through a series of “claims.” Legal action is currently under way against Cleveland Bridge.

The news will increase speculation that Multiplex will be forced into further cut backs of its UK development drive and make further disposals from its euro 6.55 billion ($5.47 billion) UK portfolio.

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