Carillion has formed a surprise joint venture with Sir Robert McAlpine and Spanish contractor Dragados to bid for the £295m Borders Railway PPP in Scotland

The firm had previously said it would take on bigger jobs by itself after its civil engineering division doubled in size with the £572m takeover of Alfred McAlpine in February 2008.

Building understands it will battle Vinci, Bam Nuttall, Balfour Beatty and a Fluor/May Gurney joint venture for the deal, which is due to be awarded in autumn 2011.

In December Transport Scotland put a notice in the EU’s Official Journal to find three tenderers to take part in competitive dialogue. Expressions of interest are due on 17 March.

The contract comprises civil engineering and building works, as well as maintaining the line for 30 years. It will include 49km of railway and seven stations between Edinburgh, Midlothian and Tweedbank.

Preliminary works on the job have started, including the diversion of key utilities. Main works are scheduled to begin towards the end of 2011.

The railway will be delivered with finance from the private sector, but with initial payments coming from the Scottish government.