Shortlist for £2.7bn Birmingham PFI revealed

05/05/2022
Dominic Browne

A shortlist of two bidders has been revealed for the restructured £2.7bn Birmingham highways PFI contract.

SNC-Lavalin and Kier Highways have been formally invited to tender for the capital and maintenance works following the prequalification process, in which the contractors 'demonstrated suitability, technical ability and commitment to health and safety'.

CEO of Birmingham Highways Limited (BHL), Natasha Rouse said: 'We are confident that the collaborative approach to procurement, embedded in the competitive dialogue process, will lead to an optimal and sustainable solution.'

BHL is the special purpose vehicle owned by Equitix and PIP Infrastructure Investments that has been working to restructure the contract after the previous PFI deal with Amey led to a legal dispute and was terminated in March 2020.

Officially, the special purpose vehicle is sub-contracting the PFI deal and will retain its own contract with Birmingham City Council until the end of the PFI in 2035.

Briefing meetings are due to take place with SNC and Kier this month following the invitation to participate in dialogue.

The two competing firms are expected to prepare interim submissions and draft bids to help inform dialogue and progress negotiations.

Final contract bids are expected for the end of the year and should be formally submitted in January 2023, with the new contract due to be awarded in April 2023.

During the intervening period, both bidders will undertake further due diligence, engagement and dialogue.

In a statement, BHL revealed that the bidders will have access to the updated Management Information System (MIS), 'which has been brought up to date and contains the latest detailed information about the extent and condition of the network'.

The shortlisted pair also have access to a comprehensive and detailed project information package and advisor briefings, which are aimed to provide a platform for a competitive and transparent process.

'The entire tender process for the Birmingham Highways PFI contract has been structured to provide participants with the opportunity to actively participate in dialogue to ensure the contract provides value for money and a robust risk profile,' BHL said.

Kevin Hicks, assistant director for highways and infrastructure at Birmingham City Council, said '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 covers more than 2,500km of roadways and 5,000km of footways across the UK’s largest local authority.

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