Dominic Browne 13 June 2018

Contractor ordered to pay Birmingham £50m in PFI dispute

Contractor ordered to pay Birmingham £50m in PFI dispute image

Amey Birmingham Highways Ltd (ABHL) has been ordered to pay Birmingham City Council more than £50m in compensation after the contractor's loss in the Court of Appeal earlier this year in a long running dispute over a highways PFI, according to reports.

Adjudicator Andrew Goddard QC found in favour of the council’s claim that it had overpaid Amey, as the contractor had not carried out road maintenance work that the Court found it was obliged to.

In February this year, the Court ruled against what it called Amey’s 'ingenious new interpretation' of the 25-year PFI deal it entered into in 2010.

ABHL was 'deliberately leaving the defects in selected areas untreated' the court found and had 'been carrying out works based on inaccurate inventory information'.

In May, Amey's parent company Ferrovial reported it had been forced to set aside around £208m to tackle the possible losses from the Birmingham deal, which had been bogged in dispute since 2014.

Describing their work in Birmingham as 'one of the most capital intensive projects in Europe', a spokesperson for Amey said: 'The ongoing dispute with Birmingham City Council is related to the way in which this investment is allocated to deliver the best possible services and value for money across the city, and we are considering all the available options to help achieve this.

'In the meantime, we continue to deliver our essential service to the city to maintain the safety of the Birmingham roads, and play an active part in the wider local business community.'

Birmingham City Council declined to comment as adjudication decisions are confidential. 

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