Ferrovial has announced that its subsidiary, Amey, has reached an agreement to terminate the Birmingham Highways PFI contract
Amey has agreed the deal with Birmingham City Council that allows it to exit the troubled £2.7bn Birmingham Highways PFI contract. The deal brings an end to a long-running dispute that had delayed the sale of Amey.
The relationship between Amey and Birmingham council had become extremely hostile and in early June it was revealed that Amey had been fined £48.5m by the council because of delays repairing four bollards.
The agreement will mean Amey will pay £215m, with £160m to be paid in 2019 and the remaining £55m over the next six years.
The Birmingham Highways PFI contract settlement, which had incurred a five-year legal battle, will allow Ferrovial to sell Amey.
It also prevents the risk of a Carillion-style collapse for Amey, after Ferrovial wrote off £670m on the company in February.
Ferrovial said: “Amey will continue to provide services on an interim basis until 30 September 2019, and this period may be extended until 31 March 2020.
“This agreement does not have [an] impact on the profit and loss account of Ferrovial.”
Ferrovial has put Amey up for sale to narrow its focus to transport infrastructure, including its profitable toll roads business in North America.