Sunday 14 April 2019 2:27 pm

Amey ‘makes fresh £300m bid’ for freedom from Birmingham roadworks contract


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

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

Follow Alex Daniel

Outsourcer Amey has offered £300m to Birmingham city council in a bid to free itself from a 25-year contract to repair roads in the city, according to reports.

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The struggling UK company has been trying to buy its way out of the troublesome contract for months, after having a £245m offer rejected by the council in February.

In its latest bid, Amey raised the stakes even further with an informal offer of £300m to the Labour council in recent days, the Sunday Times reported.

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.

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.

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.

Amey declined to comment this afternoon.

City A.M. understands the outsourcer’s offers have been made to a special purpose vehicle set up for the PFI contract signed in 2010.

A Birmingham city council spokesperson told City A.M. the negotiation was ongoing, but would not comment on “individual numbers being bandied around”.


They added all offers had thus far fallen on deaf ears because they had “failed to reasonably recognise the works and liabilities that they propose to leave behind”.

“Those offers… have also been made with unreasonably short deadlines for acceptance – in one case as short as two hours.”

Read more: Amey eye Birmingham council contract exit

The council gets about £50m in PFI credits every year from the contract. Earlier this month it emerged Birmingham had fined Amey £48.5m after repairs to four bollards were delayed.

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