Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Jarvis offloads PFI arm in rationalisation move

NEWS - Vinci is expected buyer of Jarvis's ailing private projects division as new boss refocuses on transport work

JARVIS, once a name synonymous with the Private Finance Initiative, will not bid for any more work in the sector.

Last week the firm announced it had reached an agreement to get rid of its PFI bid team, which has masterminded the latest private projects on which it is preferred bidder.

The planned sale to Vinci, for a rumoured £6 million, will see four schemes, including a deal to build 37 schools for Norfolk County Council, being built by the French giant's UK building arm, Norwest Holst.

A Jarvis source said: 'If the sale doesn't go through with Vinci we will be getting rid of PFI. It's going come what may.'

The firm said it would honour its facilities management contracts on completed PFI projects such as the army training college in Harrogate, North Yorkshire.

A spokesman said: 'A serious decision has been made to concentrate management resources on core functions rather than peripheral ones.'

Under new chief executive Alan Lovell, former boss of Costain, Jarvis will now focus almost exclusively on transport infrastructure work, such as rail renewals for Network Rail, and its roads maintenance business for local authorities and the Highways Agency.

The firm has also signed a freight deal with Scottish Coal and is keeping its Lancashire-based roads products business, which specialises in producing traffic calming equipment. It will also carry out railway vehicle maintenance, which looks after on-track plant, and is keeping its plant arm.

Jarvis is also in negotiations with private equity group Star Capital Partners to sell its one-third stake in Tube Lines, the company upgrading the Jubilee, Northern and Piccadilly lines on London's underground network. The sale is expected to fetch £130-£150 million, some of which will be used to pay off a debt of £260 million.

The changes mean Jarvis's workforce will be trimmed to 6,000 from 10,500.

Turnover will halve to about £600 million.