Amey offers £300m escape route to Birmingham City Council

Infrastructure giant Amey has tabled a £300m offer as it looks to find a route out of its entrenched and costly battle with Birmingham City Council over the highways contract.

The two organisations are currently at loggerheads over a £2.7bn, 25-year contract and involves Amey maintaining the 1,600-mile road network under the council’s jurisdiction.

According to the Sunday Times, Spanish-owned Amey has made an informal offer to the council as it attempts to buy its way out of the private finance initiative (PFI) contract.

Recently, the council rejected an offer of £245m to get out of the contract in February. Amey then refused to pay a £55m interest bill owed to the council, which only continues to increase.

Earlier this month it was revealed that Amey had been fined £48.5m because of delays in repairing four bollards.

The deal was first signed in 2010. For the past five years, the two have been involved in an increasingly difficult legal battle, which ended in defeat for Amey last year.

The Court of Appeal ruled in favour of the council, with the judge criticising the company for not repairing roads and paths as per the contract, and suggesting it had made an “ingenious” interpretation of the original deal.

Amey’s Spanish owner Ferrovial, which co-owns Heathrow, wrote off €774m (£670m) on Amey in February. It refused to provide a guarantee for the business, which posted a £189.8m pre-tax loss for 2017 after being forced to make a provision of more than £200m for the Birmingham contract.