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Interserve JV lands £150m Herts, Luton and Reading priority schools

The Education Funding Agency has chosen an Interserve Kajima joint venture as selected bidder to deliver the Hertfordshire, Luton and Reading batch of priority schools, worth up to £150m.

Construction News can reveal Interserve Kajima has beaten Morgan Sindall and Wates to the job, which will be the first project to use the government’s private finance 2 funding model.

The joint venture will design and build seven schools in Hertfordshire, Luton and Reading under the Priority School Building Programme. It will also provide maintenance services to the schools for a 25-year period.

The construction value of the Hertfordshire, Luton and Reading batch is expected to be £122m, while the total funding required for the batch is up to £150m.

Under PF2, 90 per cent of the funding requirement will consist of private finance raised by a central debt fund, known as the financial aggregator.

The remaining 10 per cent of the funding requirement will be made up of 80 per cent equity from the main contractor and 20 per cent equity from the public purse.

The EFA has shortlisted three financial joint ventures to raise £700m of private finance for the PSBP and intends to select a winner in mid-2014.

The EFA, Interserve Kajima and seven schools will now engage in a six-month detailed design stage and expect to reach financial close in October 2014.

Construction is due to start from November 2014 through to March 2015, with planned completions due for August 2016.

Overall, work on 46 schools across five batches will be privately financed while the remaining 215 schools are being capitally funded.

Four of the five PF2 batches have gone out to tender. The final batch covering schools in the Midlands is expected to start procurement in April.

Interserve and Morgan Sindall missed out on the EFA’s £4bn main contractors’ framework, and so only have the opportunity to bid for privately financed batches of priority schools.

Wates was appointed to the main contractors’ framework last November, through which the remaining batches of capitally funded priority schools are being procured.

The HLR schools are:

  • Bishop’s Hatfield Girls’ School, Hatfield, Hertfordshire (Academy) 
  • Goffs School, near Cheshunt, Hertfordshire (Academy)
  • Kings Langley School, Kings Langley, Hertfordshire (Academy)
  • Longdean School, Hemel Hempstead, Hertfordshire (Academy)
  • Reading Girls’ School, Reading, Berkshire (Foundation)
  • Stopsley High School, Luton, Bedfordshire (Foundation)
  • Westfield Academy, Watford, Hertfordshire (Academy)

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