Sunday 17 February 2019 5:52 pm

Amey eyes escape route from Birmingham road repair PFI contract

City A.M’s industry and manufacturing correspondent. You can follow me on @alexmdaniel, or email:

City A.M’s industry and manufacturing correspondent. You can follow me on @alexmdaniel, or email:

Outsourcer Amey is reportedly approaching an agreement with Birmingham city council to pay it £200m to escape a long-term PFI contract to repair roads in the city.

Spanish infrastructure giant Ferrovial, which owns Amey, has been trying to offload the firm since last year, but it needs the contract out of the way before this can happen.

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The £2.7bn deal has been the subject of a five-year legal battle between the two, and Amey claims it has not been paid for the work since the end of 2017.

But the Sunday Times reported yesterday the two were finally closing in on a deal which would allow Amey, one of the government’s biggest suppliers, to be sold.

An Amey spokesperson said: “The Birmingham contract is just one of hundreds of contracts across the UK which Amey operates successfully.

“It is no secret that the ongoing dispute in relation to the Birmingham Highways PFI deal remains a challenge.

“That is why we are working closely with Birmingham City Council, Cabinet Office and a range of other stakeholders to reach a resolution which is in the best interests of all sides, and importantly delivers for the people of Birmingham.

“If we do not reach a settlement we will continue to meet our obligations under the contract for the remainder of its term to 2035.”

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Birmingham City Council declined to comment.

Amey employs 19,000 people in the UK and carries out contracts for the Ministry of Defence and the Ministry of Justice. Its profits last year took a hit when it was forced to ring fence £209m to cover possible losses on the Birmingham City Council contract.