Costain has left “one of the most critical road improvements in the North of England” less than a year after being appointed by National Highways.
The contractor was appointed alongside Balfour Beatty, Kier and Keltbray on the £1.3bn A66 Northern Trans-Pennine project in October, with the firms appointed to work together for the remaining single carriageway sections of the road
The works also involved upgrading the junctions between the M6 at Penrith and the A1 at Scotch Corner and were described by National Highways at the time as “one of the most critical” in the North of England.
Carreteres Nacionals confirmed that Costain had abandoned the project, while the other contractors continued to execute the work.
A spokesman for the roads body said: “National Highways and Costain have agreed a change in procurement strategy, which will see Costain’s involvement in the A66 finally being organized and managed. We would like to thank Costain for his work during the development phase of one of our most significant and complex projects”.
He declined to comment further on why the change had been made.
A Costain spokesman said: “We have held regular meetings with National Highways on the A66 scheme. As a result of these meetings we have both agreed a change in procurement strategy which will mean that Costain’s involvement in the development phase of the A66 will eventually be organized and managed. We will continue to bring our innovation and expertise to other critically important national motorway projects.”
The move comes just under a month after the contractor’s work to improve barriers on the nearby M62 was canceled following a National Highways Assessment. This project was originally part of a smart motorway upgrade between junctions 20-25, abandoned after the government pulled the plug on the programme.
As of 9.30am today, Costain’s share price was down more than 8 percent from its price earlier this week.
However, a client note from investment bank Liberum said concerns about the firm’s contract book were “overblown”.
He said: “The order book remains broadly unchanged at the FY22 level of £2.8bn, indicating that the new wins match the order burn and we expect positive contract news ahead of the results of the H1 23 in August.
“There have been two exits on the road subdivision, but we don’t think it has weakened Costain’s relationship with national roads.”
