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O'Rourke loses out on gas deal

CONTRACTS - UTILITIES

LAING O'Rourke is the big loser after blowing it in the race for a slice of a massive £1.8 billion gas renewals package.

Four consortia have sealed wins on the National Grid Transco Alliance package, the biggest network replacement deal to hit the UK.

But a team featuring Laing O'Rourke and McNicholas Construction is the only one to taste defeat.The quartet of deals span a minimum of seven years, with a possible extension of five more years.

Balfour Beatty snatched the Greater Manchester package, worth £40 million annually.

Skanska's joint venture with McNicholas Plc has scooped the north London area, also worth £40 million, while Amec and a Morgan Est/Parsons Brinckerhoff pairing have taken the M1 corridor (Sheffield and Nottingham) and Birmingham areas respectively. Both these deals are worth £30 million a year.

The four teams will take control of the contracts on December 31, with work on site starting next April.

The Alliance method is intended to improve communications between contractor and client with both partners considered equal. Any savings on work are shared, as are any losses.Tenders were considered on a quality and expertise basis with safety another important factor.

One successful bidder said: 'Losing wasn't an option.The O'Rourke team must be gutted.'

The bid from Laing O'Rourke and McNicholas Construction has been put in reserve.

The pair may now focus their efforts on the smaller maintenance packages on offer, which include deals in the north-west, north London and eastern England, worth £10 million annually. Also up for grabs is a £14 million-a-year contract in the West Midlands.

The smaller packages run for three years with a possible extension to five.