Consortium of Balfour Beatty, Skanska, Atkins and Egis Projects SA will receive £6.2bn for work
The much-delayed M25 PFI scheme has finally been signed.
The Highways Agency (HA) will pay the Connect Plus consortium, comprising Balfour Beatty (40%), Skanska (40%), Atkins (10%) and Egis Projects SA (10%) £6.2bn to carry out the work. This is £1bn more than was originally estimated for the design, build, finance and operate (DBFO) contract.
The M25 motorway DBFO contract is a 30-year concession during which time Connect Plus will be responsible for widening key sections of the M25 and providing operating and maintenance services and lifecycle replacements on the whole road, including strategic road links in and out of London, totalling 250 miles.
Transport minister Andrew Adonis said: “Today marks a major step forward in increasing the capacity of the M25.
“The widening schemes, combined with the maintenance and operation of the M25 network for the next 30 years, will reduce congestion, improve journey time reliability and safety and bring benefits to road users.”
Up to 200,000 vehicles a day use the sections of the M25 that will be widened. The work is being phased to reduce the impact on road users and keep as many lanes open as possible.
During the initial three years of the contract the construction joint venture, Skanska Balfour Beatty, will add some 40 miles of additional capacity to the M25 between Junction 16 (M40) and Junction 23 (A1 at South Mimms) and Junction 27 (M11 at Bell Common) and Junction 30 (A13 at Thurrock). As part of the contract, the Skanska Balfour Beatty construction joint venture will refurbish the A1(M) Hatfield Tunnel. All of this work is scheduled to be completed ahead of the London 2012 games.
Balfour Beatty Capital, the group's infrastructure investment arm, will invest £80 million of equity in the project over the initial three years.
The total amount of project funding is £1.3 billion, comprising £925 million of senior debt provided by 16 commercial banks, a separate £185 million facility from the European Investment Bank and £200 million provided by the shareholders of Connect Plus.
It had been widely expected that the Treasury’s PFI unit would be required to support the concession but, though much delayed, the scheme achieved close without this requirement.