Carillion wins PFI contract from MoD

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A £12bn contract to provide new and refurbished barracks for the Army was awarded yesterday to a consortium led by the UK construction group Carillion.

The 35-year contract, under the Government's Private Finance Initiative, will include new garrisons and modernisation of existing ones in Aldershot and across Salisbury Plain for 18,000 personnel - 20 per cent of all those barracked in the UK. It is the biggest PFI estates deal signed by the Ministry of Defence.

The work will be undertaken by Aspire Defence, owned 50 per cent by Carillion, 45 per cent by the US contractor Kellogg Brown Root and 5 per cent by HSBC. The three partners are putting in £120m of equity and are raising a further £1.8bn in bond finance.

Carillion, which has recently completed the takeover of rival construction group Mowlem, said it currently has a portfolio of 30 PFI projects involving total equity investment of £171m.