A fiercely contested bidding process for a huge road maintenance contract in Birmingham has seen all but two contractors eliminated from the running. The final choice to take on Birmingham's restructured highways PFI contract, worth £2.7 billion, is between Kier Highways and SNC-Lavalin.
Birmingham Council established its own special purpose business, Birmingham Highways Ltd (BHL), to oversee the bidding. The formal invitation to bid has therefore come from BHL.
The progress of the maintenance contract has been closely watched within the industry since Amey bought itself out of the contract over two years ago. Amey's withdrawal followed several years of legal dispute and negotiation. Since the company pulled out, the contract has been looked after on a temporary basis by Kier, while the restructuring took place.
Kevin Hicks is Birmingham City Council's assistant director for highways and infrastructure. He expressed the council's positive attitude now that the uncertainty over the future cause by Amey's withdrawal has been removed:
"The city council has worked hard with BHL to restructure the contract and ensure that it remains an exciting opportunity to deliver quality services in Britain's second city. We are looking forward to this next stage of dialogue with the bidders and developing how they propose to deliver highway services on our behalf through to 2035."
The contract in its new form provides for capital works and maintenance across the UK's largest local authority area, consisting of 2,500km of roadways and 5,000km of footpaths. Kier and SNC are now embarking on the preparation of interim submissions and draft bids. Final bids will be submitted in January 2023, with the winner announced three months later in April, after a last round of due diligence.
The bidding process has been structured in such a way as to provide maximum transparency and access to management information, and therefore ensure that whoever wins the contract will be able to deliver both value for money and an exceptional road network.
New roads in the Midlands and the West
Kier has also been busy elsewhere, winning the £460 million contract for work on the A417 between Gloucester and Swindon. Kier will construct a new section of dual carriageway to replace the existing 4 mile single-lane section of this extremely important route, which is a popular alternative to the M5/M4 route via Bristol.
Currently this stretch is prone to frequent and unpredictable congestion. Michael Goddard is the Project Director for the A417 and he commented on the decision to appoint Kier: "We are delighted to be working with Kier to move forward this vital scheme. Kier has an extensive track record working with National Highways and delivering large scale infrastructure projects, so we are confident they will deliver a scheme that meets our landscape-led vision. We will work together to deliver a project that is sympathetic with the special character of the Cotswolds Area of Outstanding Natural Beauty and will support economic growth, improve traffic flows at peak times and make the road safer."
Grant Schapps, the Transport Secretary, is expected to authorise the project after considering the planning inspectorate's imminent report.
Meanwhile, a similar scheme in Lincolnshire is to be delivered by Balfour Beatty. The company has been awarded a £212 million contract to build the new North Hykeham Relief road, a dual carriageway which will connect a local bypass with the A46 Pennells roundabout. Work is scheduled to begin in November 2025 and the road will be opened towards the end of 2028.
Martin Hill, the leader of Lincolnshire County Council said of the project: "The new relief road will form the final section of a complete ring road around Lincoln, making it worlds easier for local people, commuters and anyone else passing through to get around. It will also form part of Lincolnshire's coastal highway, making it easier for people from all over to get to our beautiful coast."