Financial close for North East Schools PPP

03 January 2008

Carillion joint venture achieves financial close on South Tyneside and Gateshead Building Schools for the Future PPP contract valued at £175m.

Support services and construction company Carillion and its joint venture partners, The Local Education Partnership (LEP), have achieved financial close on the £175m South Tyneside and Gateshead Building Schools for the Future (BSF) programme.

The LEP will deliver 14 secondary schools in the current wave of the BSF programme, with a total area of approximately 100,000 square metres. This wave of the programme will also include the provision of healthcare facilities. As well as investing some £2 million of equity in the project, Carillion will carry out the construction work in three phases over four years, starting in January 2008 with all schools open to pupils by January 2012.

Carillion will also provide FM services for the new schools over the life of the 25-year concession contract, to the value of approximately £16 million. This involves the delivery of FM services including mechanical, electrical and building fabric maintenance, caretaking, security, cleaning and grounds maintenance services and full life cycle responsibility.

The LEP will also provide further new schools for South Tyneside and Gateshead in subsequent waves of the BSF programme and may deliver other community regeneration projects, subject to these receiving the necessary approvals.

Commenting, Carillion chief executive, John McDonough, said: “We are delighted to have achieved financial close on our first project under the BSF programme, which we expect to be a strong growth area for the Group. We have built an excellent partnership with South Tyneside and Gateshead Councils that has resulted in financial close being achieved in just 12 weeks. We look forward to developing this successful partnership to deliver the ‘Education Vision’ for both Councils with state-of-the-art community focused schools. The contract also includes the delivery of a £5 million primary care centre co-located with a new council community centre and library and demonstrates the flexibility of this procurement route for providing a wide range of community improvement initiatives.”

The Local Education Partnership comprises Partnership for Schools, South Tyneside and Gateshead Councils, Carillion and Royal Bank of Scotland. Partnerships for Schools and South Tyneside and Gateshead Councils will provide 20% of the equity with the remainder being provided by Inspired Spaces, a joint venture between Carillion (40%) and Royal Bank of Scotland (40%).

Information technology will be provided by Morse with the design team comprising Ryder Architects, Cundalls Engineers and Colour Landscape as architects.
www.carillion.com