Balfour Beatty wins preferred bidder status in decade-long £1.5bn Network Rail contract

Construction firm Balfour Beatty is set to be tasked with overseeing a wide-ranging program of railway track renewals and crossings for Network Rail for the next decade, in a £1.5bn contract.

The UK’s biggest constructor, which carries out key public infrastructure projects such as Hinkley Point and Crossrail, has been selected as “preferred bidder” for the contract.

Shares rose 1.2 per cent this morning.

Read more: Balfour Beatty back to 'industry standard' margins

Leo Quinn, Balfour Beatty chief executive, said: “As one of the UK's leading rail infrastructure suppliers, Balfour Beatty is proud to be part of the alliance appointed to ensure reliability of the UK's rail network. Our expertise will be focused on driving innovative solutions that deliver sustainable, safer rail infrastructure.

“We believe that industry collaboration is the way to drive higher efficiency and service standards. Network Rail's new alliance model is a great step forward in rail contract procurement.”

Balfour will take an 80 per cent share in the contract to do key repair and maintenance work across Network Rail’s railway lines in London and the east Midlands.

Smaller contractors Atkins and TSO take a 10 per cent share of the contract each.

Full contract award is expected in the second quarter of 2019 with works due to commence later this year.

Read more: HS2 station contracts worth £2.56bn awarded

The news follows the publication of strong full-year results yesterday, in which Balfour’s construction margins returned to industry standard levels, but revenue shrunk as the firm continues streamlining its business after several years of a turnaround.

Balfour’s work in the UK includes contracts on HS2, Crossrail and the Hinkley Point C nuclear power plant.