Latest Public Sector News

05.04.19

Birmingham City Council fines Amey £50m over bollard repairs after ‘total breakdown’ in relations

Birmingham City Council has fined highways firm Amey £48.5m after the contractor failed to replace two damaged sets of roadside bollards, the latest development in an increasingly toxic row over the pair’s 25-year contract.

The city council has charged Amey £58,000 a day for the delays to repairing the bollards designed to prevent drivers from swerving around speed bumps, with the authority accused of “holding its own road network hostage” by Amey.

The council said “emergency” damage to the bollards should have been fixed within an hour, and that road users had been put in danger due to months it had taken Amey to carry out the repairs.

Due to the ‘emergency’ rating, the initial £250 penalty fee doubled hourly until the bollards were fixed, costing a total £31m for one set of bollards and £17.5m for the other after Amey took a year to carry out the first repair and seven months for the second.

Amey argued that the repairs should have been marked as category two or ‘non-urgent’ which would have resulted in a fine of £2,500 instead of £48.5m.

The 25-year PFI contract, worth £2.7bn, between the council and contractor, has become increasingly bitter, with some citing a “total breakdown” in the relationship.

Last month it was reported that Amey was prepared to pay more than £200m to free itself from the troubled contract to repair Birmingham’s roads, and the two were involved in a five-year legal battle over the contract which the outsourcing giant lost.

Plans to upgrade roads and pavements across the city have been put on hold due to the dispute.

A spokesperson for Amey said: “Birmingham city council continues to hold its highway network hostage by not signing off the upgrade schemes put forward or by moving forwards with a resolution.

‘We are at a critical point. The contract has not worked for either party. Amey’s value has been written down – it is obviously in the council’s best interests to get another company in.

“Again Amey would like to extend our offer to meet with Birmingham’s leadership and officers.”

Birmingham City Council said: “We take our responsibilities to manage our contractors seriously and where a contractor is found to be underperforming then we will not hesitate to take appropriate action in order to protect the public purse.”

“Dangerous issues that are not dealt with by Amey will therefore attract financial adjustments; the longer they are left and the more dangerous they are, the more those adjustments increase.”

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