Babcock International wins £800 million to manage London Fire Brigade fleet

Babcock International has scored its second major contract win in two days, scooping a deal worth about £800 million to manage the London Fire Brigade’s 500 vehicles until 2035.

However, US sources have told the Evening Standard that Babcock could face a legal challenge to the £7 billion deal to clean up a dozen of the UK’s historic nuclear sites that the group surprisingly won yesterday.

The incumbent contractor on the Magnox deal, Utah-based EnergySolutions, and its new partner, San Francisco’s Bechtel, were heavy favourites and are now “evaluating the options”, which include judicial review.

A source close to the other two losing bidders said the competition was so tight — and Babcock’s partner Fluor so inexperienced in UK nuclear work — that they could join forces with Bechtel in a legal challenge.

Investors remain impressed at Babcock’s extraordinary start to the week, with shares up 3.49 per cent today to 1394p. The London Fire Brigade deal will see Babcock look after 50,000 pieces of equipment and invest in operational premises in Ruislip and a new site in Greenwich.

This makes up for some of the ground Babcock lost last week, when it asked investors for £1.1 billion through a rights issue to buy search-and-helicopters group Avincis.

This news resulted in Babcock’s worst day of trading in three years as shares slumped 6.7 per cent.