Costain is to merge its environment and communities divisions to focus on new business in highways, rail, airports, water and waste treatment

Alan Kay, the former chief operating officer, will become managing director of the division, and David Jenkins, former managing director of the environment division is retiring as a result of ill health.

Alex Vaughan, managing director of community, is to become corporate development director.

Andrew Wyllie, Costain’s chief executive, said: “Our large customers are imposing increasingly strict criteria in selecting their preferred contractors. In particular, they are looking for contractors capable of providing the full life-cycle of services.

“This process is in turn creating significant barriers to entry. In order to succeed, it is essential that Costain has the scale and ability to deploy the resources required by such customers,” he added.