Costain is growing its PFI business and recruiting 400 staff as part of chief executive Stuart Doughty's ambitious plan to increase turnover 15% and widen margins to 3%.
The focus on PFI reverses the strategy announced by John Armitt, the former chief executive, and Miles Roberts, the outgoing finance director. They said the firm would focus on traditional contracts and repeat business.

The change of strategy is one outcome of Doughty's review of Costain's business, which he began after taking over from Armitt during the summer. He said Costain, which has struggled to grow after suffering cumulative losses of more than £600m in the mid-1990s, needed to move ahead or risk being left behind.

Doughty is aiming to increase Costain's facilities management, oil and international divisions. Doughty wants facilities management to make up half of group turnover by 2003.

The company is to concentrate on partnered projects rather than fixed-priced competitively tendered work.

Costain will open a Birmingham office, although its Glasgow office is to be closed, along with its Scottish business. Doughty said the group would still bid for large projects in Scotland.

He added that his plans had the backing of Costain's board, which is dominated by three shareholders who own 72% of the company. He said: "The board is committed to backing us to get more equity stakes [in PFI projects]. There's too much happening in PFI not be involved."

Costain currently has equity stakes of up to £3m in three projects. Doughty said: "We've got to take equity stakes so it is an equal marriage, rather than just contracting for the consortium."

Doughty said that Costain was launching a national recruitment drive and would target staff at rivals such as Bovis Lend Lease and Laing Construction.

He said: "There are a lot of people on the market who are good and are looking for new jobs."

Doughty added that a replacement for Roberts would be announced in the next few weeks.

He said it was likely to be a person from inside the industry.

The group is also intending to appoint another non-executive director to the board.