Amey to pay £215m to exit Birmingham highways PFI

Amey is close to striking a deal that could see it stump up £215m to walk away from its troubled Birmingham highways maintenance PFI contract.

Birmingham City Council chiefs are understood to have agreed a proposal with the highways maintenance contractor, which will be formally ratified next month.

It is understood that Amey could pay £130m in cash up front, with a further £85m in staged payments over five years.

Also Birmingham City Council would hold £85m of deductions and penalties imposed on Amey, which have been subject to legal disputes between the two.

Together this would amount to a £300m divorce settlement for the council from Amey’s Spanish parent Ferrovial.

Amey has been locked in a five-year legal battle with the council over performance on its £2.7bn PFI deal. This has already seen Amey Highways suffer serious losses.

The Spanish infrastructure group is aiming to sell-off its UK support services business Amey but the 25-year PFI contract has proved a major obstacle.

A council spokesman would not confirm leaks to Sky News of the proposed deal but said:  “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.”

An Amey spokesman said: “We are encouraged by recent progress and appear to be arriving at a deliverable solution guaranteed by Amey.

“The next few days are critical to finally concluding this issue.”

Galliford Try issues profit warning

Galliford Try is undertaking a strategic review of its construction business after issuing a fresh profit warning.


Further hits have been distilled on the completed Queensferry Crossing

The firm said it aimed to reduce the size of the construction business as it focused on key strengths in markets with sustainable prospects for profitability and growth.

Galliford Try warned it expected to report pre-tax profits £30m-£40m below previous forecasts, after final settlement on the £1.4bn Queensferry Crossing project.

Galliford Try’s joint venture with Dragados, Hochtief and American Bridge International had to meet costs of delays due to high winds on the Forth bridge project.

In a statement it said:  “The board anticipates that this review will result in reduced profitability in the current year reflecting a reassessment of positions in legacy and some current contracts and the effect of some recent adverse settlements, as well as the costs of the restructure.”

It said the single largest readjustment related to the Queensferry Crossing joint venture, which has recently increased its estimated final costs on the project.

It said its position over the claim covering the completed Aberdeen Western Peripheral Route, and the £38m work in progress balance in respect of three contracts for a single client was unchanged.

The review will scrutinise contract positions throughout the construction business and assess operational progress. The outcome of the review over the next few weeks will be reported in a trading update in mid May.

Streetwork contractors to be made to give five-year pothole guarantees

The Department for Transport plans to make utilities contractors guarantee their reinstatement’s for five years.

Transport secretary Chris Grayling has launched a consultation on increasing the guarantee on utility firms’ roadworks form two years to five years, so that if a pothole forms as a result within five years, the company must return to bring the road surface back to normal.

The consultation seeks views on a new edition of the Specification for the reinstatement of openings in highways, a statutory code of practice for street works. It also introduces new asphalt standards.

Transport secretary Chris Grayling said: “Road surfaces can be made worse by utility companies, so imposing higher standards on repairs will help keep roads pothole-free for longer. The proposals also allow for new innovative surfacing to be used, such as asphalt with a high bitumen content that is easier to compact to the required density. This makes it less prone to potholing.”

Article Courtesy of ‘The Construction Index’

£2.3bn London HS2 station contracts awarded

HS2 has named its preferred construction partners to deliver its two major station projects in London.

HS2 will more than double capacity at Euston station with 11 new platforms

A joint venture between Mace and Dragados has beaten rival bidder Costain/Skanska to secure Euston station with a bid of around £1.3bn, which is below the original project estimate of £1.65bn.

Eleven new platforms for HS2 will be built at the station in two stages as part of a phased approach that means less disruption for passengers.

Mace and Dragados have a strong track record of delivering complex and demanding infrastructure projects including Battersea Power Station (phase 2), Mumbai International Airport Terminal Two and work on delivering the Spanish high speed rail network, including the major new Madrid Atocha and Barcelona Sants stations.

The decision will be a blow for Costain/Skanska, which was considered a frontrunner because it had already mobilised at the London station where it is early works contractor.

Also Costain/Skanska/Strabag have the Hs2 tunnel contracts linking the two London stations.

As part of the wider Euston station area development Lendlease is drawing up a masterplan that could support up to 14,000 new jobs and almost 4,000 new homes, as well as shops, cafes and public spaces.

Old Oak Common station designed by WSP and architects, WilkinsonEyre

The other station at Old Oak Common in north west London will be built by a Balfour Beatty/Vinci joint venture who as construction partner will work with HS2 and designers to coordinate the delivery of the station, including platforms, concourse and links to the London Underground and other rail services.

The full consortium is made up of Balfour Beatty Group /VINCI Construction UK/VINCI Construction Grands Projets /SYSTRA.

It beat bids from BAM Nuttall/Ferrovial Agroman (UK); Bechtel and Mace/Dragados, which under the rules could only secure one station project.

Balfour Beatty and Vinci have experience of some of the world’s most complex construction projects, including the new Tours-Bordeaux TGV, Thames Tideway tunnel and the London 2012 Aquatics Centre.

At Old Oak Common, the arrival of HS2 is expected to help kick-start the UK’s biggest regeneration project, transforming the former railway yards into new neighbourhoods supporting up to 65,000 jobs and 25,500 new homes.

HS2 trains will pass below the conventional station which has overbridge links to Crossrail

This complex station project has also come in just at just over £1bn, again less than the original budget estimates of up to £1.3bn.

A light and airy concourse will link both halves of the station with a soaring roof inspired by the site’s industrial heritage.

The six 450m HS2 platforms will be built in a 1km long underground box, with twin tunnels taking high-speed trains east to the terminus at Euston and west to the outskirts of London.

It is expected that around 4,000 jobs will be supported during construction of the two stations.

HS2 Chief Executive, Mark Thurston said: “Euston and Old Oak Common are two of the most important elements of the project – two landmark stations which will help unlock tens of thousands of jobs and new homes across the capital. Together with our Birmingham stations, they will transform the way we travel and set new standards for design, construction and operation.

“Mace/Dragados and Balfour Beatty/VINCI have a strong track record of delivering some of the world’s most challenging and exciting infrastructure projects and I look forward to welcoming them to the London teams.”

Article courtesy of Construction Enquirer – Feb 2019

Crossrail delayed again as costs rise by another £2bn

Crossrail has bust its budget by another £2bn as further delays to the opening of the project were confirmed.crossrail liverpool street passageway northern line moorgate
Another extra financing package worth more than £2bn was agreed on Monday afternoon as Crossrail chiefs admitted they couldn’t guarantee hitting the revised opening date of Autumn 2019. The network was originally due to open this week after being heralded for years by the previous management team as “on time and on budget.”

Mayor of London Sadiq Khan said: “It has been increasingly clear that the previous Crossrail Ltd leadership painted a far too optimistic picture of the project’s status.”

Crossrail first admitted this summer that the project had bust its original £14.8bn budget by £590m and was running late. The revised total cost of the project is now £17.6bn.

The latest financing package has been agreed by the Mayor of London, the Greater London Authority and Transport for London. It comes as an independent review by KPMG into financing and governance on the project nears completion. It revealed an estimated £1.3bn to £1.7bn shortfall in funding to complete the project plus the need for an extra £750m contingency fund.

New Crossrail chief executive Mark Wild also confirmed that “having reviewed the work still required to complete the project, an Autumn 2019 opening date could no longer be committed to at this stage.”

It was revealed that “core elements of the infrastructure being delivered by Crossrail Ltd, including the stations and the fit out of the tunnels, are at varying stages of completion and more funding is therefore required to complete it, as well as the extensive safety and reliability testing needed for the new railway systems.”

Mayor Khan said: “I haven’t hidden my anger and frustration about the Crossrail project being delayed. This has a knock-on consequence of significant additional cost to the project. It has been increasingly clear that the previous Crossrail Ltd leadership painted a far too optimistic picture of the project’s status.

“I have ordered the release of all Crossrail Board minutes in the last five years to provide transparency to Londoners on their decision making, and working with the DfT, brought in a new leadership team.”

Tony Meggs will become the new Chair of Crossrail Ltd replacing Sir Terry Morgan who resigned last week.

Meggs, who will step down from his role as CEO of the Infrastructure and Projects Authority (IPA), will oversee the final stages of delivering the Crossrail project.

The Crossrail Ltd Board will be further strengthened with the nomination of former MP Nick Raynsford as Deputy Chair.

Mike Brown, London’s Transport Commissioner, said: “Crossrail Ltd’s announcement of the delay to the Elizabeth line is extremely disappointing and, only now, is the scale of what is yet to be completed becoming clear.

“The confirmation of this funding agreement will now allow Crossrail Ltd and its new leadership to focus on finishing the remaining construction work on the stations and tunnels and then completing the vital safety testing in order to open the railway for passengers as quickly as possible.

Mark Wild, Chief Executive, Crossrail Ltd, said: “Since I joined Crossrail Ltd in November I have been reviewing the work still required to complete the core stations and rail infrastructure and begin the critical safety testing.

“It is evident that there is a huge amount still to do. Stations are in varying stages of completion and we need time to test the complex railway systems. This means that I cannot at this stage commit to an autumn 2019 opening date.

“My team and I are working to establish a robust and deliverable schedule in order to give Londoners a credible plan to open the railway and provide a safe and reliable service.

“Once that work is completed we will then be in a position to confirm a new opening date.”

Article courtesy of – Grant Prior (Construction Enquirer)

HS2 unveils Crewe Link £1.6bn civils bid plan

HS2 has outlined plans to split the proposed West Midlands to Crewe section of the high speed railway into two civils contract packages.

Procurement chiefs said they are still keeping procurement options open with the possibility of running a competition between its four existing phase one joint venture contractors instead of a pre-qualifying a fresh field of bidders.

A current market testing exercise will help to inform the decision about which procurement route to take later next year.

The 39km southern section of the HS2a route is expected to cost up to £870m while the shorter 28km northern section including two short tunnels is estimated to cost up to £750m to build.

The procurement process could start by the third quarter of next year, with bids being invited in the first quarter of 2020, and the winning bidder announced by Spring 2021.

Design work for phase 2a is expected to begin next year, with construction scheduled to start as early as 2021

Article courtesy of Aaron Morby – Construction Enquirer

Winners revealed for Highways England work bonanza

Highways England has chosen the winners for one of its biggest ever framework deals.

It is thought the names will be officially confirmed shortly of contractors who have bagged places on the programme worth up to £8.7bn over the next six years.

It is understood the winners are:

  • North West/North East/Yorks/Humber: Costain, Balfour Beatty, Kier
  • South West: Vinci, Galliford Try
  • East & West Midlands: BAM Nuttall, Skanska
  • South East: BAM Nuttall, Balfour Beatty
  • East: Skanska, Galliford Try, Costain

The framework replaces the present Collaborative Delivery Framework and sees Interserve, Morgan Sindall, Hochtief and Sisk miss out on the work carve up.

Under the new Regional Delivery Partnership arrangement, contractors will become delivery integration partners, designing and constructing motorway and major A-road projects across England under NEC4 standard terms, with suitable amendments.

Article courtesy of Grant Prior – Construction Enquirer

HS2 firms gearing up to create 15,000 jobs by 2020

Contractors and consultants working on HS2 are gearing up to employ a 15,000-strong workforce by 2020.

Over 7,000 roles are already supported by the project, and over 2,000 business have already won work with HS2, ahead of the main construction start next year.

According to a new HS2 project skills strategy document a whole generation of engineers, designers, architects and geologists will benefit from the construction of the new high speed railway as the project gears up to support 30,000 jobs at peak construction.

Mark Thurston, Chief Executive of HS2 Ltd said: “Our skills strategy shows how we will create a sustainable pipeline of jobs and skills for companies across the whole country, which boost regional economies and help Britain compete internationally.”

Opportunities will be opened up through a new Job Brokerage Service to help people access the jobs created by the HS2 supply chain, and a new Secondary Education Engagement Programme will help the next generation to enter transport infrastructure careers.

Laing O’Rourke’s Explore Manufacturing factory in Worksop is gearing up to produce precast elements for five major bridges with 35 jobs due to be created to deliver the order.

Balfour Beatty Vinci JV is set to be the largest HS2 recruiter in the West Midlands, offering thousands of jobs to local people.

Consultant Mott MacDonald has already created 300 jobs, set to double in 2019, to deliver design for the BBV joint venture.

Earthmoving contractor, CA Blackwell (Contracts) is planning to create 500 new jobs in Buckinghamshire as it gears up to lead on HS2’s earthworks in the region.

While Costain Skanska JV has created 500 jobs already as it prepared to deliver its southern route sections of the project.

In total, 500 people at consultant WSP offices around the country are working on HS2, including 220 people on the Phase One stations with 39 different specialists on each station.

Presently over 100 apprentices are working on the project, with 2,000 expected over its lifetime.

North West’s first smart motorway fully-operational

The M60 in Greater Manchester is officially the North West’s first fully-operational smart motorway, Highways England has announced.

On 31 July the final package of smart improvements along junctions 10 to 18 of the M60 in Greater Manchester went live. The milestone means that the entirety of the motorway, from Junction 8 at Sale to Junction 20 at Rochdale is now fully-operational.

But what does this mean for motorists? In addition to an extra lane running in both directions of the M62 between junctions 18 and 20, CCTV technology and electronic signage have been installed across the M60 and M62. The introduction of variable mandatory speed limits means that the motorway can be more responsive to incidents as and when they occur, meaning less congestion and frustration at stop-start driving conditions.

“Going ‘live’ this week marks the most significant milestone for this project,” said Highways England Senior Project Manager Jonathan Stokes. “We would like to thank users of the M60 and M62 and people living around them for their patience and support over the last few years while we have worked to deliver this vital investment in what is an almost uniquely complex environment.

“Although this is the first smart motorway in the North West the system has been running successfully in other parts of the country for several years – including around Leeds – and we’re confident it will deliver safer, smoother and more reliable journeys.”

The project’s completion has also paved the way for further resurfacing works along key sections of the M60, and a programme of overnight resurfacing and bridge maintenance is expected be underway later on in the month. This is all part of a £100 million investment in highways maintenance across the North West.

Four more smart motorway schemes, worth an approximated £500 million and delivering 90 miles of additional lanes to the local road network, are also due to be completed over the next few years. With the first smart motorway in the North West now operational, Highways England has also encouraged motorists to learn more about the new system with the guidance available.

Article Courtesy of UK Construction Online

North West to get 100 miles of new motorway lanes

Highways England has said that more than 100 miles of extra lanes will be added to the North West’s motorways through schemes starting on site in the next 18 months.

Four new smart motorway schemes – with a combined value of about £500m – are due to start construction work within the next 18 months, it said.

Contractors for Highways England will begin work on the first one later this summer – a nine-mile stretch of the M62 linking the M6 near Warrington to the M60 near Eccles.

Drivers have already been able to use over 10 miles of extra lanes on the M62 near Rochdale since December last year, and a stretch of smart motorway has also been completed on the M60 near the Trafford Centre.

The final temporary narrow lanes were removed earlier this week on the Manchester smart motorway scheme, and more than 200 electronic signs are due to be switched on later this month on a nine-mile stretch of the M60 between Trafford Park and the M62/M66 interchange at Simister Island.

Mike Bull, Highways England’s smart motorways programme manager for the North, said: “Smart motorways have been proven to be effective at tackling congestion, with the smart motorway on the M62 in West Yorkshire saving commuters an average of 30 minutes each week.

“We’ll be starting work on four new smart motorways in the North West over the next 18 months and will do everything we can to keep disruption to a minimum, including only closing parts of the motorway overnight when traffic levels are much lower.”

Smart motorways use technology that monitors traffic levels so that variable speed limits can be set automatically on overhead electronic signs to keep traffic moving at a steady speed.

New CCTV cameras will also provide 100% coverage of the routes and Highways England will be able to display red Xs on overhead signs to close any lane, allowing its traffic officers and the emergency services to get through.

Construction work will begin on a three-mile stretch of the M62 near junction 12 this summer. Temporary narrow lanes will be introduced to allow contractors to work at the side of the motorway, and a 50mph speed limit will be needed for the safety of drivers and workers. The roadworks will be gradually extended to junction 10 by the autumn and the smart motorway scheme is due to be completed by spring 2020.

Work will start in spring 2019 on a four-mile smart motorway on the M56 near Manchester Airport, and on a 10-mile stretch of smart motorway on the part of the M6 which links the M62 near Warrington to the M58 near Skelmersdale.

A new 19-mile smart motorway will be created over the Pennines on the M62 between Rochdale and Brighouse. The route will link up with other schemes on the M62 to create almost 60 miles of smart motorway between the North West and Yorkshire, with construction work due to start in autumn 2019.

Article courtesy of The Construction Index July 2018