The battle for Birmingham’s restructured £2.7bn highways PFI contract has been whittled down to two contractors.
SNC-Lavalin and Kier Highways will battle it out for the job after Birmingham Highways Ltd (BHL), the council’s special-purpose vehicle, formally invited them to tender for the restructured contract.
The procurement process began in February with a five-week pre-qualification stage, more than two years after Amey bought itself out of the contract after five years of legal wrangling.
Since Amey’s exit, Kier has been carrying out the contract on an interim basis, while the terms of the PFI were redrawn by Birmingham City Council and BHL.
It has now been announced that both Kier and SNC-Lavalin progressed through the qualification stage, demonstrating suitability, technical ability, and a commitment to health and safety.
The restructured contract covers capital works and maintenance of more than 2,500km of roadways and 5,000km of footways across the UK’s largest local authority.
Briefing meetings are due to take place with SNC and Kier this month, following the invitation to participate in dialogue. The two competing firms will be 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. Bidders will have access to the updated management information system, which has been brought up to date, and contains the latest detailed information on the extent and condition of the network. Bidders will also have access to a detailed project information package and adviser briefings, which aim 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 participate in dialogue to ensure the contract provides value for money and a robust risk profile. This will enable the winning bidder to deliver an exemplar service, optimise collaboration and provide a better road network for Birmingham.
Birmingham City Council assistant director for highways and infrastructure Kevin Hicks 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.”