Spanish infrastructure company Ferrovial yesterday announced a cut the value of UK contractor Amey from €877m to €103m, and has reiterated that its entire services division is on sale.
The write-down in the book value of Amey follows its defeat in a long and acrimonious legal dispute with Birmingham council over the interpretation of a £2.7bn, 25-year roadsÂ maintenance contract, the largest PFI roads deal in UK history. The decision forced Ferrovial to make a £208m provision, and led to a €161m loss in the first quarter of 2018.
The company said: "The UK subsidiary, and the other stakeholders involved in the contract, are negotiating with the council to attain a solution that is satisfactory to all parties." It also adds that it had been hid by "numerous uncertainties" caused by a fall in local authority spending.
As well as the UK, Ferrovial Services operates in Australia, Canada, Chile, Poland, Spain the US.
Image: Amey was hit by a Birmingham road maintenance contract dispute. This is Birmingham’s "Spaghetti junction", where the M6 meets the A38 (Highways Agency/Creative Commons/CC BY 2.0)