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Three shortlisted for £150m private finance schools

The Education Funding Agency has shortlisted three contractors to compete for the first batch of privately financed priority schools worth £150m.

Morgan Sindall, Wates and a joint venture between Interserve and property developer Kajima will bid for the Hertfordshire, Luton and Reading batch of seven schools.

The three bidders will now enter a 17-week competitive dialogue period with the EFA, with the final bids due in the first week of January 2014.

Overall, the batch of schools is expected to take 15 months to procure.

Wates has previously won batches of capitally funded schools in the Priority School Building Programme and has been shortlisted for the EFA’s £4bn contractors’ framework along with Interserve and 13 other contractors across the North and South lots.

Wates won the £33m East of England batch of priority schools and £36m first Midlands batch, but Construction News revealed Interserve lost out to Kier for the £30m South batch.

Morgan Sindall could not bid for the capital batches, as they were procured through the existing contractors’ framework, and the contractor has also missed out on the EFA’s new £4bn school building framework shortlist.

But chief executive John Morgan insisted to Construction News this month that the contractor was not about to exit the education sector despite the blow.

The preferred bidder will design, build, finance and maintain the seven schools in Hertfordshire, Luton and Reading and provide hard and soft facilities management services.

Under the government’s private finance 2 model, work will be funded through private finance raised by an aggregator and around 10 per cent equity contributed by the selected bidder and the public sector.

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.

The EFA issued an OJEU notice for the master aggregator on 7 August to raise between £600m and £800m of private finance to fund the rebuilding of 46 schools.

Herts, Luton and Reading is the first of five batches of priority schools to be rebuilt using private finance.

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