Amey refuses to pay penalties for road PFI contract in Birmingham

Subscribe to our newsletter and get the latest news and business opportunities in your inbox

Birmingham City Council has disclosed that, since being ordered in June 2018, Amey has refused to pay the approximately GBP55 million (US$70.4 million) + interest that it owes to the council, regarding its Private Finance Initiative (PFI) contract to operate and maintain the city's road network.

This sum represents payments received by Amey for road maintenance work that the council claims has not been carried out. An adjudicator backed the council's claim for compensation in June, given that agreed performance indicators have not been met.

The council submitted this claim after a ruling by the Court of Appeal in February this year that Amey was failing to carry out work it was obliged to undertake under the PFI contract, making the company liable to penalties and deductions. Amey attempted to appeal the ruling before the Supreme Court, but was refused leave to appeal on 30 July 2018.

Amey has stated that it strongly refutes the claims put forward by the council and accuses it of a number of material errors and inaccuracies.

The council also disclosed that lenders have placed the Holding Company for the SPV in administration.

Share this update