News Releases
Two new PFI successes for Balfour Beatty in Birmingham with a combined capital value of over £130 million
03 Apr 2006Birmingham Schools and Sandwell Affordable Housing PFI Schemes reach financial close
Balfour Beatty, the international engineering, construction and services group, announces today that it has reached financial close on its Birmingham Schools PFI project, which has a capital value of £74 million. At the same time, the Sandwell Metropolitan Borough Council affordable housing scheme, in which Mansell will carry out £57 million of new build and refurbishment work in conjunction with Riverside Housing, has also reached financial close.
Commenting today, Balfour Beatty Chief Executive, Ian Tyler, said:
“We are delighted to have reached financial close on projects which will greatly enhance the learning environments of schoolchildren in Birmingham and deliver sustainable improvements for the residents of Wednesbury South. These successes further underpin our leading position in the education market and confirm the potential for PFI as a procurement vehicle in the fast-growing affordable housing sector.”
In Birmingham, the 30-year schools project will provide a total of 12 new and refurbished schools, including two secondary schools, nine primary schools and one early years centre. Balfour Beatty is investing
In addition to the construction programme, facilities management work to a value approaching £50 million will be undertaken by Balfour Beatty subsidiary, Haden Building Management.
Peter Farrell, Head of Education Asset Management for Birmingham City Council and the Lead Client Officer for the contract, said:
“Birmingham City Council is delighted to close this deal which will rebuild a further 12 city schools and enhance teaching and learning as a result. This is part of our commitment to transforming teaching and learning across secondary and primary school level over the next few years with schools and local communities.”
At Sandwell, Mansell has a five-year contract which will involve upgrades and improvements to all council housing on the Harvills Hawthorn and Millfields estates in Wednesbury South. The scheme will see the refurbishment of 900 homes, the demolition of 140 redundant properties and the building of 120 new homes for sale. The work will enable Sandwell Metropolitan Borough Council to reach the Government’s Decent Homes Standard by 2010. Management and maintenance services will run from 2006 to 2031.
Enquiries to:
Tim Sharp
Tel: 020 7216 6884
Notes to Editors
- This is Transform Schools’ fifth PFI education concession. The others are in Stoke, Rotherham, North Lanarkshire and Bassetlaw and involve a total equity commitment of £28.5 million. The five schemes cover over 180 schools and have a total construction value of over £500 million.
- Balfour Beatty has a portfolio of 22 PFI projects, three of which are at preferred bidder stage. These comprise five schools, seven hospitals, six road schemes, two London Underground concessions for infrastructure upgrade and power supply and a water scheme. The Directors of Balfour Beatty have valued this portfolio at £289 million.
- Sandwell is Mansell’s first major PFI affordable housing contract, in which market it is a leading player. In 2005, Mansell’s revenue from affordable housing schemes was over £160 million. Its confirmed order book in the sector is approximately £180 million, with another £400 million of potential work contained in existing framework arrangements.
- Balfour Beatty is a world-class engineering, construction and services group, well positioned in infrastructure markets which offer significant long-term growth potential. Its partnerships with public and private customers generate secure, sustainable income. Its financial position, with significant net cash and with strong operating cash flows, offers continuing flexibility to add additional capacity and expertise to the business mix and to make appropriate investments in PPP and other long-term growth opportunities.
