Amey has put aside an exceptional charge of £55m relating to the possible ‘unfavourable resolution’ of its long-running dispute with Birmingham City Council, the company’s annual report states.
The dispute, involving a £2.7bn contract to maintain the city’s roads and pavements over 25 years, went to the High Court after an unsuccessful attempt at adjudication.
.jpg)
Birmingham City Council is in a long-running dispute with Amey
Last Autumn a judge reportedly criticised both parties over their handling of the case. The case was heard in February and a judgement is awaited.
Amey’s 2015 annual report states: ‘An exceptional charge of £55.0 million arose in respect of the possible impact of an unfavourable resolution of ongoing litigation on the Birmingham contract and a revision of the contract’s profitability going forward.’
It states that the dispute resulted in a ‘post-exceptional operating loss’ of £41m for its local government division, adding: ‘Cash collections in the local government sector have proved to be particularly challenging this year, a position which has been exacerbated by the ongoing litigation on the Birmingham contract.’
The £55m charge cut by more than a half the company’s operating profit before exceptional items of £102.1m, which came from slightly increased annual revenue of £2.23bn.
An Amey spokesperson said that the company could not comment at this time due to the ongoing legal case, but added: ‘We are committed to continuing to provide a comprehensive, high-level service to Birmingham City Council and its residents.’
A spokesman for the council also declined to comment in advance of the judgement.
At the beginning of this month Amey’s new maintenance and response contract covering Highways England Area 7 in the neighbouring East Midlands went live. The contract could be worth £300m over 15 years.
Register now for full access
Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.
Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors.
Use the link below to register your details for full, free access.
Already a registered? Login
