Amey to exit road network PFI project in Birmingham

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Birmingham City Council in UK has agreed to the proposal given by Amey to exit the operation and maintenance concession of road network in Birmingham. Amey will pay total GBP 215 million (US$ 271.45 million), with GBP 130 million (US$ 164.13 million) in cash up front and GBP 85 million (US$ 107.31 million) staged payment over a period of 5 years. Apart from this amount Birmingham City Council will hold on the GBP 85 million (US$ 107.31 million) of deduction and penalties imposed on Amey due to a legal dispute between two. The overall amount accounts to GBP 300 million (US$ 380.38 million) settlement between the Council and Amey´s parent company Ferrovial.

Amey and council had been locked in a legal battle for 5 years over performance issues on GBP 2.7 billion (US$ 3.40 billion) PFI contract. Ferrovial is planning to sell its UK subsidiary, but Birmingham road PFI is being an obstacle for the sale. 

The council spokesman said that "It is now generally accepted by all parties to the contract that in order to move forward Amey must be replaced with a new subcontractor. This will require a managed release and handover to a new provider along with an appropriate settlement to rectify the liabilities Amey proposes to leave behind. While the terms of this settlement are yet to be agreed and would be subject to further agreement by the Council’s Cabinet, talks in recent days have established how an acceptable settlement could be reached and we will continue to work with all those involved to achieve an acceptable solution.”

This PFI project involves the operation and maintenance of 2,500 km of road network, nearly 100,000 street lights, as well as over 850 highway structures and bridges across the city of Birmingham, located in the West Midlands region of England, for 25 years.

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