Carillion and Interserve win MoD contracts

Suzie Neuwirth
THE MINISTRY of Defence has handed out up to £2bn of new contracts to manage its military estates, the winning companies announced yesterday.

London-listed support services firm Carillion, in a joint venture with Amey, won two contracts to manage defence infrastructure potentially worth up to £1.7bn.

The firms won a £625m five-year deal to provide facilities management services across the UK, which can be extended for a further five years.

They also won a five-year contract to provide facilities and asset management services across military sites in Scotland and Northern Ireland, worth £150m and extendable for another five years.

FTSE 250-listed Interserve announced separately that its subsidiary Landmarc Support Services has won a £322m five-year contract to manage the MoD’s military training facilities, extendable for another five years.

“For the past decade, Landmarc has worked in partnership with the Defence Infrastructure Organisation (DIO) to support the vital training that is needed to prepare Britain’s Armed Forces for operational success,” said Interserve chief Adrian Ringrose.

The swathe of new contract awards come ahead of a separate report from the public accounts committee today, which questions whether the MoD underspending on equipment procurement by £1.2bn in 2012-13 will simply save up costs for later.

“If the department does not address this underspending it will be tempting for the Treasury, in seeking further public expenditure reductions, to take these underspends as savings at the expense of the defence equipment capabilities our armed services need,” said committee chair Margaret Hodge.

“We are confident that the £164bn 10-year equipment plan is not only affordable, but sustainable, meaning we no longer have to make short term cuts that delay programmes,” said Philip Dunne, minister for defence equipment, support and technology.