Latest Public Sector News

19.02.19

Amey looking to escape Birmingham roads contract with £200m divorce bill

Amey could be set to pay more than £200m to free itself from a troubled 25-year PFI contract with Birmingham City Council to repair its roads following a five-year legal battle with the authority.

The outsourcing giant lost the legal fight with the city council over the deal worth a total of £2.7bn in the Court of Appeal following a number of problems.

As reported in the Sunday Times, Amey’s parent company, Ferrovial, is looking to terminate the contract with Birmingham City Council.

Freeing itself from the deal would allow the Spanish infrastructure giant to sell Amey, which has been hit with a host of high-profile controversies including Sheffield’s tree cutting contract and a struggling super contract with Trafford Council.

The Sunday Times reported Ferrovial, which also co-owns Heathrow airport, were nearing an agreement on an exit as it looks to cut its losses, and it is believed to have made several attempts previously to exit the contract.

Birmingham City Council is reportedly holding out for a settlement for £300m to terminate the contract which sees Amey maintain Birmingham’s 1,600-mile road network.

An Amey spokesperson said: “The Birmingham contract is just one of hundreds of contracts across the UK which Amey operates successfully. It is no secret that the ongoing dispute in relation to the Birmingham Highways PFI deal remains a challenge.

“That is why we are working closely with Birmingham City Council, Cabinet Office and a range of other stakeholders to reach a resolution which is in the best interests of all sides, and importantly delivers for the people of Birmingham.

“We will continue to meet our obligations under the contract for the remainder of its term to 2035, or until such time an alternative position is agreed.”

The news comes amid an ongoing dispute between Birmingham City Council and Unite bin workers who today started their first wave of strike action.

The union members claim some staff have been blacklisted by the council for taking part of industrial action in 2017 which saw piles of rubbish pile up on the streets, with the city council also seeking a court injunction against the workers.

Marc Bruxelle

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