THE construction of a £46m water treatment works in Horsley will continue despite financial problems faced by the contractor.

Government contractor Interserve, which was awarded the contract in 2016, went into administration on Friday.

The upgrade to the existing works at Horsley, which were built in the 1970s, will provide water for 800,000 people.

Interserve has been sold to shareholders and banks via a “pre-pack” administration, meaning the sale of the business and any assets of the company is negotiated before the appointment of administrators. This means the company can continue trading as normal.

Northumbrian Water assets and assurance director Ceri Jones said: “We expect all our contractual arrangements with Interserve to continue as normal without disruption.”

Debbie White, Interserve’s CEO, said: “With a stronger financial platform in place, Interserve will be able to concentrate on delivering value for our customers. Interserve is fundamentally a strong business and with a competitive financial platform in place we see significant opportunities ahead as a best-in-class partner to the public and private sector.”