EM Highway Services has been awarded a £599 million asset support contract (ASC) that will see it operate, maintain and improve the strategic road network in the West Midlands.
This is the sixth asset support contract awarded by the Highways Agency. From July 2014, the company will take over responsibility for the maintenance of major roads in Area 9.
Asset support contracts are driving efficiencies across the strategic road network, and are on course to achieve 25% cost savings by 2015 compared to 2010. In return, contractors get more freedom to decide how they carry out their work, and can also take on larger road projects in house.
The contract is valued at £599 million over five years and will cover more than 450 miles of major roads such as the M5, M6, M40 and the M42 around cities like Birmingham, Coventry and Stoke-on-Trent.
David Brewer, the Highways Agency’s asset delivery director, said: “England’s major roads are vital to the economic and social wellbeing of the country and we are increasing investment to improve the capability and condition of the network.
“More than 90% of the Agency’s expenditure is delivered through contractors and we have long led the way in designing contracts that deliver results for road users at best value prices for taxpayers. I look forward to continued innovation and collaboration under this new contract, working together with EM Highway Services to deliver a more effective and efficient network in the West Midlands.”
Key features of asset support contracts (ASCs) include:
• Maintenance standards which are ‘outcome based’ and less prescriptive about how and when work is delivered
• Affordable levels of service, with appropriate quality but no reward for over-delivery
• Incentives for innovation and efficiency, including the opportunity for contract extensions
• Simplified pricing mechanisms with a ‘year on year’ cost reduction mechanism
• A higher cost threshold for works to allow more procurement through the ASC rather than by separate tender
• Managing technology maintenance and improvement works through the main contract for more efficient and joined up delivery.
Dave Wright, EM managing director, said: “We continue to successfully deliver our portfolio of MAC contracts to a high standard and, having recently mobilised our first ASC contract in Area 3, I am confident we can make Area 9 ASC, along with Area 3 ASC, the leading examples of how a successful contract of this type should perform.”
Grant Rumbles, chief executive of Mouchel, added: “We are delighted to add Highways Agency Area 9 ASC to EM’s significant contract portfolio. To win two of the Highways Agency’s new ASCs in a calendar year reaffirms EM’s position as the public sector partner of choice for the strategic highway network.”