Kier has been named as the preferred bidder for a restructured 11-year PFI contract to maintain Birmingham’s roads, but the move still requires government approval.
The company has maintained the city’s road network on an interim basis since 2020, after an earlier deal with Amey collapsed.
Amey was appointed on a 25-year, £2.7 billion deal in 2010 but agreed in 2019 exit the agreement after a legal dispute with the city council.
Since then, Birmingham Highways Ltd, the council’s special purpose vehicle, has been working with Birmingham City Council and the Department for Transport to restructure the roads PFI contract.
Kier and the Canadian firm SNC-Lavalin, the parent company of AtkinsRéalis, were last year invited to bid for the revised agreement, which covers capital works and maintenance of more than 2,500 km of road and 5,000 km of footpath.
Kier’s services under the new contract would start on 1 February 2024 and continue until June 2035. Birmingham Highways said “transition activity” in preparation for this had already started after the period of suspension expires on October 23.
But Kier’s appointment to the revised contract is subject to government approval. Birmingham City Council and Roads are currently in talks with the Department for Transport and the Treasury, who are considering the business case for the revised deal.
Ahead of today’s announcement, the council’s political leadership had said the government should “pull the plug” on £600m of motorway contract funding “letting the clock run out on the appointment of a new subcontractor” before the February deadline.
Natasha Rouse, chief executive of Birmingham Highways Ltd, thanked Atkins for their “commitment and professionalism throughout the tender process”.
He added: “This announcement is an important milestone for Birmingham Highways Ltd, Birmingham City Council and all our stakeholders, who have been working diligently with us to restructure this contract and deliver long-term value and investment for in Birmingham.
“We are delighted to be moving forward with Kier and starting to deliver the full scope of the investment in Birmingham’s road network from February 2024.”
James Birch, managing director of operations and maintenance at Kier Transportation, said: “We are delighted to have been appointed as the preferred bidder for the Birmingham Highways Ltd contract. We provide maintenance and repair services to the extensive road network in city since April 2020.
“The appointment of the contract will enable us to continue to deliver a safe and sustainable transport network in Birmingham.”
The government appointed commissioners to oversee Birmingham last month after the council announced in September that it could not balance its budget. The local authority faces a liability for unresolved equal pay claims that could reach £760m.
