P0989 - Highway Maintenance and Management PFI Contract Restructuring Support - AWARD

Birmingham City Council invites tenders for advisory services for restructuring of the council's Highway Maintenance and Management PFI contract, together with consequences that arise out of the restructuring of the contract

BACKGROUND

The council entered into a 25-year PFI contract in June 2010 to provide highway maintenance and management services on its 2,500+km highway network. The contract is with Birmingham Highways Ltd (BHL), which delivers the Services through a subcontractor.

The Highway Maintenance and Management PFI (HMMPFI) contract is the primary means through which the council discharges its statutory duties (predominantly under Highways Act, 1980 and New Roads and Streetworks Act, 1991) to maintain public highways for which it is the relevant authority.

The HMMPFI contract was subject to a settlement in June 2019 whereby:

• i.The subcontractor was replaced with an interim subcontractor; and
• ii.The council worked with BHL to:
• (a)restructure the contract; and
• (b)procure a long-term replacement subcontractor.

The procurement of a long-term replacement subcontractor is currently underway, with dialogue due to complete at the end of November 2022. The restructuring of the contract is expected to be completed in February 2023, subject to:

• i.Receiving compliant and acceptable tenders;
• ii.Approval of the council's revised business case with government; and
• iii.Approval from BHL's senior creditors.

Subject to this process, the long-term replacement subcontract is expected to be signed in April 2023 and commence on 1 September 2023.

SCOPE OF THIS CONTRACT

This restructuring support contract relates to advisory services for restructuring of the council's Highway Maintenance and Management PFI contract, together with consequences that arise out of the restructuring of the contract. Such consequences include (but are not exclusively limited to):

• i.Advice to the council relating to alternative positions should it not be possible to complete a restructuring of the contract;
• ii.The council's funding for highway maintenance and management services from HM Government;
• iii.Mobilisation for longer-term highway maintenance and management services;
• iv.Any litigation related to the contract or successor arrangements.

The restructuring support contract is expected to commence in December 2022 & will expire on 30 June 2024