Birmingham’s Highways Private Initiative could be cancelled, says council

Birmingham’s Highways Private Finance Initiative (PFI) contract, worth £50 million per year to the city, could be cancelled by the Chancellor, Jeremy Hunt.

The PFI deal would see Birmingham receive £600m over the next 12 years to upgrade and maintain the city’s roads, pavements and streetlights. However, it is now widely believed the government is set to pull the plug on the PFI deal by letting the clock run down on the appointment of a new subcontractor before the February 2024 deadline, reports Yahoo News.

In a recent council meeting, the leader of Birmingham City Council, Coun John Cotton, said: “If the Treasury pulls the plug on the PFI contract this will be a complete betrayal of Birmingham that would see our city lose out on £600 million of funding between now and 2035.

“Time is running out and we need the government to take a decision in the next week or we risk transport chaos in our city. For the sake of everyone who lives, works, or visits Birmingham, I urge the Treasury to honour the PFI contract.”

Birmingham City Council’s transport chief Coun Liz Clements added: “If the Treasury abandons our PFI deal then this will have an impact on every single resident in Birmingham. Whether you prefer to walk, cycle, take the bus or drive, your ability to travel safely around our city will be hit.

“This decision would compromise our ability to complete the essential works required to ensure our residents are safe on the roads and footways. This would also be a blow to our ambitious Route to Zero programme, as we would not have the funds needed to maintain our walking, cycling and bus priority infrastructure.”

Originally agreed in 2010, the PFI deal was set to last for 25 years, however issues with the original sub-contractor were said to have left the authority with no option but to terminate the contract in 2019. Birmingham Highways Limited has since been working to appoint a new subcontractor to take on the PFI contract once again.

If government funding is not continued, a new contractor cannot be appointed, and the city will likely lose the benefit of around £600m of funding between now and 2035, said the Yahoo News report.


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