£2bn city highways contract is Yorkshire region’s biggest deal

Sheffield City Council is currently in the final stages of agreeing a radical £2bn PFI contract spanning the next 25 years, which will see an as yet unannounced private firm take control of the city’s entire network of streets and highways.

Under the terms of the unprecedented deal due to be signed early next year the winning company will undertake a six-year programme of renovation to bring Sheffield’s notoriously pot-holed roads up to an acceptable standard, and then maintain them at that level for the duration of the contract.

All aspects of the council’s highways department’s role will be handed to the private firm, from sweeping the streets to emptying litter bins and repairing benches and street signs.

The council has secured £1.2bn in PFI “credits” from the Government – effectively a huge grant – towards the project, meaning the deal has been widely welcomed in a city where the notoriously pot-holed streets have been the source of much public angst for many years.

“Most PFI deals in the past have been about building accommodation – schools or office blocks, for example,” said Michael Platt, Sheffield City Council’s project director. “Obviously this is quite different.”

With actual public works representing only one aspect of the overall deal, Mr Platt suggested it may prove better value for money than other construction-only projects, where the cost of private-sector borrowing has meant schemes end up costing far more than if they had remained in the public sector.

“The funding costs are only one small element of this,” he said. “There is a transfer of risk here which is a major benefit to ourselves.”