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Skanska primed for £120m military intelligence HQ

Skanska is tipped to take a deal worth up to £120 million to build a new home for military intelligence staff in Cambridgeshire.

The firm, which last week parted company with chief executive David Fison after seven years, is understood to have seen off bids from rival defence contractors Carillion and a Babcock/Bovis Lend Lease joint venture for the deal to convert existing facilities at RAF Wyton, near Huntingdon, into a purpose-built facility for Defence Intelligence Staff, a division of the Ministry of Defence.

The division is responsible for intelligence collection and analysis as well as functions such as military map production and the training of military linguists and photographers.

Under the deal, being procured by Defence Estates, work will involve a comprehensive overhaul of the site, which is currently home to accommodation and support units of the MoD’s Defence Equipment & Support division.

The value of the project had initially been anticipated to be less than £100 million but has grown as the MoD has taken the decision to co-locate further -intelligence units at Wyton.

Because of the nature of the job, the MoD has not released firm details of what will be built but planning applications show the development is expected to include 28,000 sq m of office space, workshops, vehicles stores, sport pitches and mess facilities as well as 360 rooms to accommodate staff.

Skanska has a strong track record with the MoD, having carried out an £82 million development of barracks at Woodbridge, Suffolk, under a prime contract in 2006.

Between 2000 and 2004 it also built the Ministry’s new headquarters in Whitehall under a £340 million PFI deal.

Skanska is expected to formally sign the deal with Defence Estates by the end of the year.

Chief executive David Fison resigns following PPP losses

Skanska chief executive David Fison resigned last week after failing to stem losses in the firm’s PFI hospital building operations.

His departure came as the firm’s Swedish parent company announced write downs of £19.5 million on UK PFI health work in the second quarter, bringing the amount written down to £47.5 million since the start of the year.

The losses relate to three projects, understood to include the firm’s PFI hospitals currently under construction in Derby and Nottinghamshire.

Mr Fison has been replaced by Mats Williamson, former president of Skanska Sweden, who took up his new role at the beginning of this week. He said that he would be working with the current management team to implement changes to internal processes identified in a review of its construction projects in the PPP sector earlier this summer.

Mr Williamson has been with Skanska since 1981, establishing his reputation as project executive of the Öresund bridge between Denmark and Sweden. He became president of Skanska Sweden in 2002.

UK revenue in the first half of the year was £758 million up from £696 million but it made an operating loss of £41 million.