Birmingham Highways Decision delayed by another 6 months
The search for a new longer term contractor for the Birmingham Highways PFI contract has been delayed.
After years beset by problems with the former incumbent Amey who eventually were bailed out to the tune of £300m by parent company Ferrovial to buy themselves out of the contract, Kier have been the interim partner doing a great deal to steady the ship and ensure continued delivery of works.
Having commenced a pre-qualification stage on the contract back in February, more than two years after Amey exited - following five years of legal battles, Birmingham City council initially planned to award the contract in April 2023.
Birmingham City Council cabinet meeting papers, however, reveal that the contract award has been pushed back to “August 2023 and […] is expected to commence in November 2023.”
The restructured contract covers capital works and maintenance of more than 2,500km of roadways and 5,000km of footways across the UK’s largest local authority.
In May, a special purpose vehicle was set up to handle the contract Birmingham Highways Ltd (BHL) and at the time shortlisted interim incumbent Kier and SNC-Lavalin as the preferred candidates.
The contract covers amongst other things maintenance of more than 2,500km of roads and 5,000km of pathways making it UK’s largest local authority.
Birmingham Conservative leader Robert Alden raised concerns about a potential three month gap in its highway contract due to the delay in awarding the contract.
The new contract - expected to be worth around £1.2bn - will cover the remaining 12 years of the initial PFI agreement, from 2023 to 2035.
Since Amey's exit, Kier has been carrying out the contract on an interim basis, while the terms of the PFI were redrawn by Birmingham City Council and BHL.
Birmingham City Council assistant director for highways and infrastructure Kevin Hicks said that the procurement process had been extended by three months "to help bidders deliver the most optimal bids".
He added: "This extension is coordinated with all parties, which includes the interim contract holder, and we are currently formalising the extension of the interim contract to align with the new procurement programme so no gap with the maintenance of the road network will occur. The extension to the programme remains subject to approval by DfT.”