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Welsh councils to create civils firm to take on PFI work

News

FIVE WELSH local authorities this week said they were planning to turn their in-house engineering departments into a major civils firm by forming a joint venture with a private consultant.

Gwent Consultancy - owned by Welsh unitary authorities Blaenau Gwent, Caerphilly, Monmouthshire, Newport and Torfaen - this week shortlisted Pell Frischmann, Parkman, Babtie and outsourcing specialist Capita as potential partners.

The resulting joint venture will bid for work across the UK and abroad.

The JV will double Gwent's size to 400 staff which will help it bid for more of the £1.2bn of European Union funded urban regeneration work in Wales over the next six years. It also plans to bid for schemes emerging from Wales' 10 year transport plan, expected to be launched next year.

'There's no reason why the joint venture can't bid for project management and design work for trunk roads anywhere in the UK or even abroad, ' said a Gwent spokesman.

Under the deal, Gwent Consultancy will take a 49% share in the joint venture which is expected to bid for privately financed infrastructure projects.

Normally local authorities take smaller stakes in such ventures because government borrowing rules prevent them from investing in privately funded projects. The Gwent decision to take a higher stake anticipates a relaxation of rules on local authority investments.

'We believe this joint venture will be unique in ensuring an almost equal share for the public sector partner as it is usually below 20%, ' said Gwent Consultancy managing director Graham Cogswell. 'This will preserve our public service ethos.'

A decision on the joint venture partner is expected by the end of the year.

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