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Amey and Birmingham council fail to reach settlement on highways contract

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Amey has confirmed that it has yet to resolve its dispute with Birmingham City Council about its 25 year, £2.7bn, 25-year highways PFI contract.  

According to reports in The Sunday Telegraph, the troubled contractor offered the council £175M cash, and to write off £70M of unpaid work, to settle the dispute. The council reportedly rejected the £245M offer. 

The council and contractor have locked horns over the highways contract, with the council scrutiny commitee raising concerns about Amey’s “questionable investment decisions; quality of workmanship; and performance”.  

The continuing legal dispute, stems from residents’ complaints about potholes and has hit the contractor hard. Parent company Ferrovial recently slashed Amey’s value to just £88M in a bid to sell the company earlier this year. In its previous financial update released in May 2018, Amey was valued at £748M

An Amey spokesperson said the work on the contract would continue until a solution was reached. Amey has reportedly not been paid for works on the contract since December 2017.  

“The ongoing dispute in relation to the Birmingham Highways PFI deal remains,” the spokesperson said. 

“We are committed to reaching a resolution which is in the best interests of all sides, and importantly delivers for the people of Birmingham as they look forward to hosting the Commonwealth Games in 2022. We have worked hard with a range of stakeholders to achieve this but so far have not been able to reach agreement.” 

“If we do not reach a settlement we will continue to meet our obligations under the contract for the remainder of its term to 2035,” the spokesperson added.  

A Birmingham City Council spokesperson said the council would be taking action against any underperforming contractor.  

“We take contract management very seriously and where a contractor is found to be underperforming then appropriate action will be taken. We remain in discussions with Amey to find the best way forward and this current position will not impact on the delivery of the Birmingham 2022 Commonwealth Games.” 

Under the  contract, which expires in 2035, Amey is responsible for improving and maintaining Birmingham highways infrastructure, including 2,500km of road network, nearly 100,000 street lights,and more than 850 highway structures and bridges across the city. 

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