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Amey tables £300M offer to escape Birmingham roads contract

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Amey is understood to have tabled a revised £300M offer to free itself from a £2.7bn, 25-year highways PFI contract with Birmingham council.

The struggling UK contractor previously had an offer of £245M rejected, and has now upped the offer by £55M, according to the Sunday Times.

Offers are made to the special purpose vehicle company Amey Birmingham Highways Ltd, with whom the council holds its highways maintenance and management PFI contract.

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

Earlier this month, it was revealed that Amey was fined £50M for taking over a year to replace four damaged bollards.

As part of Amey’s PFI contract with the city council, the contractor was ordered to replace the bollards as a matter of emergency.

Marked as a “category-one repairs” job - meaning the bollards posed a risk to the public - Amey was contractually obliged to replace the bollards within 24 hours of being notified.

However, Amey took one-year to repair the first set of bollards, and seven-months to repair the second set, racking up a £48.5M fine in the process.

A spokesperson at Birmingham City Council added that Amey had given “unreasonably short deadlines for acceptance [of its offers]”.

“We understand that the offers Amey has made to the SPV have failed to reasonably recognise the works and liabilities that they propose to leave behind,” the spokesperson said. “Those offers to the SPV have also been made with unreasonably short deadlines for acceptance – in one case as short as two hours.”

A spokesperson for Amey confirmed negotiations “were ongoing”.

The on-going row has damaged the contractor heavily, with parent company Ferrovial slashing 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.

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