A joint venture between Costain, Halcrow and Colas has won a two-year extension to a five-year managing agent contract with the Highways Agency.
The joint venture, A-One+, will carry out operational and routine maintenance services and deliver motorway and trunk road improvements in the East Midlands.
In July 2009, it was awarded a five-year managing agent contractor deal by the Highways Agency worth £220 million for Area 7 which covers the counties of Derbyshire, Leicestershire, Lincolnshire, Northamptonshire, Nottinghamshire and Rutland.
The contract extension is forecast to be worth £60m each year until June 2016.
Costain is currently involved in a proposed merger with May Gurney, which specialises in roads maintenance, but it is not believed it will change the terms of the A-One+ joint venture should the merger go through. Kier has expressed its interest in a rival offer for the support services firm.
A-One+ is incumbent contractor for Area 12 (Yorkshire & North Lincolnshire) and is currently bidding for an Area 3 (Berkshire, Dorset, East Sussex, Hampshire, Surrey, West Sussex, Wiltshire) asset support contract worth up to £750m over five years and due to be awarded in November.
Costain chief executive Andrew Wyllie said: “This significant contract extension demonstrates, we believe, the successful implementation of our ‘Choosing Costain’ strategy in which we focus on building long-term relationships with and winning repeat work from blue-chip customers who are spending billions on meeting vital infrastructure needs.
“This contract further contributes to the strength of our order book, which comprises approximately 90 per cent repeat business.”
Peter McDermott, Halcrow’s director for highways and bridges said: “A-one+ has worked hard over recent months to identify initial efficiency improvements that will generate significant financial savings to the Highways Agency. This extension will also provide an excellent opportunity to shape and develop innovative asset management procurement models for the future.”