A COUNCILLOR fears the financial troubles of a firm contracted to deliver bin services in Solihull means the council should reconsider its risky deal.
Private contractor Amey – owned by Spanish firm Ferrovial – collects bins and rubbish for over 88,000 properties across the borough as part of a £10million deal with Solihull Council.
The infrastructure support company is set to be sold on the cheap by Ferrovial after a valuation slump.
The value of the company is now set at £88million, after a £665million writedown.
But it has also thought to have been effected by a long-running legal dispute with Birmingham City Council over a £2.7billion private finance initiative highway maintenance contract, which the city council is seeking to terminate.
Green Party councillor Chris Williams probed the council on whether a contingency plan is in place for if the UK company, based in Oxfordshire.
Coun Williams likened the potential situation to the disastrous collapse of facility management company Carillion which left thousands of workers jobless and major projects and infrastructure unmanned.
Coun Williams at a full council meeting last week said: “Amey is currently up for sale by its Spanish parent firm.
“The buyers could well be private equity firms, one in the frame oversaw the collapse of flagship employer Monarch airlines.
“If a collapse did happen very suddenly as we saw with Carillion, what would happen to our bin collections, would we have a contingency?
“I think that’s probably the question residents want to know the answer to.”
In response, cabinet member for resources and delivering value Robert Hulland said: “The council does have a risk a register for its relationship with Amey, but it has not been felt necessary to record potential collapse.
“However we will be monitoring the situation closely, pending any formal announcements regarding Amey’s future and continue to engage with our counterparts at Amey.
“We are conscious that fairly recently Amey’s business director indicated and I quote ‘Amey is a well managed company and has a strong cash position with positive cash flows. We disclosed zero external debt in our last audited accounts.’
“Therefore we would expect the contract to be delivered.
“I am fairly confident that the work will continue and our bins will be collected.”
A press release from Ferrovial states: “Amey continues to operate normally, attaining high levels of service quality.
“Amey’s value has been affected by the situation of the UK services sector in recent years, due to numerous uncertainties attributable to budget cuts by local administrations, among other factors.
“Moreover, contractual disputes have proliferated between service providers and their clients.”
