Unpaid interest bill continues to increase on disputed £2.7bn highways contract

Amey has refused to make any inroads into a £55m-plus interest bill owed to Birmingham City Council under its controversial highways contract.

The £2.7bn, 25-year deal has been the subject of a legal battle between the two involving a payment dispute over quality of works, while Amey claims it has not been paid for the work since the end of 2017.

Both sides are seeking an end to the contract, but the dispute continues to drag on.

A Birmingham City Council spokesperson said: “We continue to work with all stakeholders to achieve a consensual replacement of Amey as soon as practicable and with regard to ensuring continuity of service.”

The contract has proved costly for Amey. Last summer, it posted a £189.8m pre-tax loss for 2017 after being forced to make a provision of more than £200m for the Birmingham contract.

An Amey spokesperson said: “It is no secret that the ongoing dispute in relation to the Birmingham Highways PFI deal remains a challenge.

“That is why we are working closely with Birmingham City Council, Cabinet Office and a range of other stakeholders to reach a resolution which is in the best interests of all sides, and importantly delivers for the people of Birmingham.

“We will continue to meet our obligations under the contract for the remainder of its term to 2035, or until such time an alternative position is agreed.”

Amey’s parent company, Spanish infrastructure giant Ferrovial, hopes to terminate the deal to expedite its planned sale of Amey.

Amey lost a five-year legal battle in the Appeal Court with Birmingham City Council over the deal last year, but the judgement seems only to have entrenched positions.

Birmingham City Council’s audit committee received a report on the Highways PFI contract in November, which highlighted how Amey had “demonstrated that they cannot be relied upon to substantively and transparently deliver the requirements of previous settlements”.

That included its refusal to pay the interest bill, which has continued to increase over the last three months.

Click here to sign up to receive our new South West business news...
Close