Carillion has said it paid £20m to restructuring its troubled rail business and integrate Mowlem after last year’s takeover.

The costs associated with the Mowlem deal are thought to account for about three-quarters of that amount.

This does not include the £135m hit that Carillion took to cover Mowlem’s problem contracts.

The contractor did have one piece of good news on Mowlem in its trading update for 2006. Its net debt for the year-end will be £110m, which is £90m less than expected when it was acquired last January.

The reorganisation of the rail business, which included the loss of about 300 jobs, cost about £5m.

Carillion, which will announce its preliminary results in March, said its results for the year would be “ahead of the current forecasts”.

The contractor said three new projects were expected to generate revenues of £325m. These are the south Ayrshire schools PPP scheme, an extension to the regional prime contract central for the Ministry of Defence and community clinical services in north London under the government’s independent treatment centre programme.