French infrastructure group Vinci has been bagging large-scale UK road Private Finance Initiative (PFI) contracts this year, the latest being a £1.2 billion (€1.5 billion; $1.9 billion) contract with the Isle of Wight authorities, a small island off the south coast of England.
Vinci, together with Ringway, has beaten competition from a consortium comprising Colas and Amey to become preferred bidder for an ambitious 25-year contract to manage and maintain more than 800 kilometres of highways across the island. The deal also calls for the refurbishment of over 12,000 street lighting columns and in excess of 2,000 illuminated street signs, as well as revamping the island’s entire CCTV network.
The Isle of Wight PFI contract includes some idiosyncrasies – such as providing university bursaries for future civil engineering students – the most significant of which is a clause implementing a profit-sharing mechanism with the island authorities in case of future equity sales.
Most of the financing from the contract will come from a government grant, with the island authorities providing “an annual contribution which will be less than the sum that it currently pays to provide the services that will in future be provided through the PFI,” the authorities said in a statement.
Works across the Isle of Wight’s roads network will begin in 2013 with the bulk of the roads to be revamped within the first seven years of the contract at an annual cost of £20 million.
Earlier this year, Vinci also won an £800 million contract from the London Borough of Hounslow Council to refurbish some 432 kilometres of roads and 763 kilometres of pavement.