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Power players vying for billions in grid upgrade

Contractors will know by the end of next month which has made it to the next stage of a £3 billion spending spree being planned by National Grid to upgrade its ageing electricity network.

The network operator is to spend up to £600 million a year from next spring to revamp a host of its assets including substations and electricity pylons.

Six contracts are up for grabs across England and Wales. They will mimic the Gas Alliances the firm set up a couple of years ago.

National Grid will unveil a shortlist of consortia in four weeks' time, with winners due to be announced in the autumn. The five-year deals will begin on April 1 next year with an option to extend them for a further five years.

Among the firms expected to be favourites for the lucrative packages are a number of the existing National Grid Gas Alliance partners, including Balfour Beatty, Morgan Est, Skanska and Amec. Laing O'Rourke, which missed out on the gas work, is also tipped to be a bidder.

The deal is being masterminded by former Carillion boss Rowan Sharples, National Grid's director of UK construction, who this week told Construction News: 'We are looking at spending £2.8 billion over five years. There is the possibility that one consortium will win more than one contract.'

The work has been split into two, with a brace of alliance contracts devoted to overhead line work in the east and west regions with the remaining four concentrating on substation work in National Grid south-east, south-west, north-east and north-west.

Mr Sharples added: 'For the overhead line work, in layman's terms we're looking at everything from refurbishing lines to replacing pylons and rusted metal. For substations it will be mainly brownfield extensions.'

The winning teams will also be expected to provide new connections from substations to the burgeoning wind farm sector. Mr Sharples said National Grid will restrict the connections to land only. Offshore wind farm developers will be responsible for laying the connections to the mainland.

Energy regulator Ofgem said this week investment in the UK's gas and electricity transmission networks should double between 2007 and 2012 to £4.25 billion.

By David Rogers