Consortium comprising Morgan Est and Balfour Beatty Utilities are selected as preferred bidder on gas contract.

Morgan Sindall and Balfour Beatty have won a £420m engineering contract to upgrade gas networks in the North of England.

Morgan Sindall's infrastructure services provider Morgan Est and consortium partner Balfour Beatty Utilities will carry out the work for United Utilities, which runs the mains system on behalf of Northern Gas Networks.

The seven year Northern Gas Networks deal could be extended for another five years, making the contract worth up to £700m.

The consortium will replace gas mains, carry out reinforcement works and install new gas connections to domestic and commercial properties across the North East, Yorkshire and Cumbria. The programme will involve the replacement of 500km of pipes each year. The contract is due to start in July.

Paul Smith, chief executive of Morgan Sindall said: "We are delighted to have been appointed preferred bidder which reinforces Morgan Est's position as a leading player within the gas distribution market."

Balfour Beatty chief executive Ian Tyler said: "We are delighted to have been awarded preferred bidder status for this contract. The award will give Balfour Beatty a leading position in gas to add to its existing leadership in the clean water and electricity sectors."