Carillion lands £192m contract to build schools in Rochdale

Construction giant Carillion has won a £192 million contract to build 13 schools in Rochdale – which takes the value of new deals announced in a month to more than £2 billion.

The Wolverhampton company has been selected as the preferred bidder for Rochdale Building Schools for the Future (BSF) programme to build or refurbish the schools over the next four years.

Work on the scheme, which has a capital cost of about £180 million, is expected to begin in January 2010.

It comes at the end of a busy month for the firm, in which £2.083 billion worth of deals have been announced to investors.

Chief executive John McDonough said there was still potential for the company to profit further from BSF, a £55 billion Government scheme to improve schools. He said: ‘We are delighted to have been appointed as preferred bidder for this major programme and look forward to building a strong and successful relationship with Rochdale, its head teachers and their staff, to provide schools that will enable them to deliver a first-class learning experience for their students, as well as high-quality community facilities.

“This latest success further consolidates Carillion’s position as one of the UK’s leading suppliers to the Government’s £55 billion Building Schools for the Future programme and brings the total value of the BSF projects that we have won or for which we are preferred bidder to £1.4 billion, in addition to which we are shortlisted for a further three BSF projects worth some £2 billion.”

Four of the 13 schools are expected to be privately financed by a combination of borrowing and equity.

In addition, Carillion expects to provide facilities management services for all four privately-financed schools, generating approximately £12 million over 25 years.

The deal comes just days after the support services giant announced it had landed a £1 billion contract to supply nationwide support for BT’s Openreach business. It has also won a £500 million BSF deal to build schools in the north east, a £116 million deal to build a Scottish prison and a £275 million contract to build a new Parliament building in Oman in the past month. The company produced a pre-tax profit of £53.6m for the six months to the end of June 2008. Shares in the company had risen by almost 10 per cent in a week yesterday, to 307.4p.