A £2.2billion contract to repair and maintain Birmingham’s roads over 25 years has been delayed after concerns about financing.

Rival firms competing for the private finance initiative deal, Amey and Birmingham Street Services, submitted final bids last year and a winner was expected before the end of 2008.

The winning bidder will oversee the upgrade, repair and maintenance of Birmingham’s 1,500 miles of road, 94,000 street lights, traffic signals, bridges, tunnels and pavements.

But Coun Len Gregory (Cons, Billesley), working on the PFI deal since becoming cabinet member for transport four-and-a-half years ago, has demanded further assurances from the bidders over funding.

His officials are concerned the bidders may not have access to the bank loans and money needed.

And it means further delay to the contract initially set to start in autumn 2006. Now the revised start date of late 2009 could be put back.

It is the second Birmingham City Council PFI project to stall in a month after the Building Schools for the Future announcement was held-up last month as education officers demanded more information.

A council spokesman insisted the Highways PFI is still on track and said: “We have the best and final offers from the two bidders. They are having to go back to their banks because we have asked for more assurances the credit and finance arrangements are in place.

“Assuming these assurances are received we expect to make an announcement within weeks.”

Behind the scenes council officers and the contractors are expecting the winner to be announced next month.

A spokesman for Birmingham Street Services said: “We have had a number of meetings with officers to check details not just the financial matters.

“Obviously they want assurances that the money is still going to be there, and it is.

“This is a long term contract which is due to last years, and hopefully the current economic situation won’t be.”

Two rivals are consortiums set up to deliver local authority PFI projects with Atkins construction and EDF Energy the partners in Amey. Laing O’Rourke and Vinci are the team behind Birmingham Street Services.

The winner will take on responsibility for the repair, maintenance and upgrades of Birmingham’s roads, bridges, tunnels, pavements, street lights and traffic signals handed over to the winning bidder in what is believed to be the UK’s largest local authority PFI bid.

They have been told they must bring the city’s highways network up to world class standards during their 25-year contract and will be able to tap into £588million of PFI credits from the government.

Trade unions have opposed the deal as its staff currently employed by the council’s transport department, will see their jobs privatised under the winning bidder and fear their pay and pensions will be reduced.