Kier bags £420m highways job

Kier has won a highways maintenance contract worth up to £420m.

The contract, awarded by North Northamptonshire Council, is worth £30m a year. It is due to run for at least seven years, with the option of being extended for up to 14 years.

Kier beat three other shortlisted bidders to the contract, which has been updated by the new council that came into existence in April 2021.

Since April 2021, highways maintenance has been delivered across Northamptonshire by KierWSP, under arrangements inherited from the previous county council.

Starting afresh from the previous arrangement, the council said the “new contract has been significantly updated to align with the challenges faced today, and over the next decade and beyond”.

A council spokesperson added: “The deal has been drawn up to ensure there is provision for a safe, legal, customer-focused and value-for-money service, while also making tangible contributions to the council’s commitment to social value, and its response to climate change and protecting the environment.”

They continued: “Kier successfully won the procurement exercise by submitting a bid that offered the best value for money and highest-quality highways service for the people of North Northants.

“​​​​​​The new contract is very much tailored towards meeting the challenges that we are currently facing and those over the coming years, and we are confident that all the ingredients are in place for the delivery of the service.”

The new plans will see North Northamptonshire Council and the neighbouring West Northamptonshire Council run their own separate contracts and services. However, as West Northamptonshire Council has also appointed Kier, this allows for some economies of scale to take place through sharing some administrative functions and contract management roles.

North and West Northants councils worked closely on the process for procuring the new highways contracts, which started in November 2020, and it has involved several selection stages to narrow down and shortlist prospective suppliers.

Graham Lawman, executive member for highways, travel and assets at North Northamptonshire Council, said: “The purpose of this procurement exercise has been to ensure we appoint a provider that can offer the best value for money for our residents. I am looking forward to working with Kier to ensure residents receive a high-quality highways service. This is an exciting new chapter in North Northamptonshire, and I’m looking forward to seeing improvements made to the network over the coming months and years.”

The decision for North Northamptonshire was made under delegated authority by Lawman, in consultation with the executive member for finance and the executive director for place and economy, and the monitoring officer.

The new contract is due to start on 12 September.

In its most recent annual accounts, to 30 June 2021, Kier’s revenue came in at £3.33bn, although it was affected by the coronavirus pandemic. In the previous year, it reported revenue of £3.48bn.

In April 2021, Kier chief executive Andrew Davies told Construction News that the “quality of the earnings and the cashflow that is coming through” would tempt investors to the firm, adding that Kier had good visibility of its cashflow, as much of its work came through frameworks and long-term public-sector contracts.

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