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Business News

Highways Agency takes 'first step' to privatisation

Body responsible for UK's main roads seeks partner to assist its transition to standalone status

The Government agency that runs and maintains 4,300 kilometres of motorways and trunk roads worth £108bn has laid down what industry insiders are calling "the first plank to privatisation".

The Highways Agency is looking for a private-sector group to help the organisation's transition from being part of the Department for Transport to a body that is run as a standalone company, though ultimately state-owned. This would see the Highways Agency given six-year funding deals from Government in what Transport Secretary Patrick McLoughlin says would reverse "decades of under-investment in roads".

However, sources in the roads sector have long been convinced that the ultimate plan is full privatisation and that whichever company wins this latest contract would be well placed for more lucrative work further down the line.

The Highways Agency has approached a number of firms that already work for the group, believed to include engineers Atkins, Halcrow, and Arup. However, another firm that is looking at the contract warned that the Highways Agency might struggle to attract interest because the contract will be awarded next month, which gives companies little time to work up bids for what is likely to be highly complicated work.

"This looks like the first big step, the first plank to privatisation," said an industry source. "But this is an extremely tight deadline, they've only given the companies a matter of weeks for a contract."

A Highways Agency spokesman said: "The agency and the Department for Transport are seeking a company with experience of a programme management service to support the transition of the agency from its current status as an executive agency to a Government owned public company. This is not a privatisation of the agency."

The contract is due to run to 2015 and the Highways Agency is also seeking a programme director to oversee the transition. An advertisement for this role has asked for applicants who can "show clear success in delivering major-change programmes".