£674m roads contract step closer

In total, a huge 674m of private finance initiative (PFI) money is to be spent on the improvements – the single biggest allocation of PFI funding for any local authority in the country.

Under the PFI, one of the three shortlisted private companies will build, run and maintain the roads and other highway services in exchange for payments over the 25-year life of the contract.

As well as revamping the roads themselves, the "Streets Ahead" scheme will also involve improvements to all other aspects of the highway system, such as footpaths, lighting and signage.

Along with the council's existing highways budget and an additional 10m a year, the 674.1m of PFI money will ensure that more than 2bn in total is spent on improving and maintaining 2,000kms of road, 69,000 streetlights, more than 350 bridges and other structures and 35,000 trees which are planted along the roadside.

Chief executive at Sheffield Council, John Mothersole, said: "We are delighted to have reached this important milestone for the project.

"It is just one year since the funding was confirmed and the council has been working hard throughout the year to develop the project to this stage."

In the first seven years of the contract – from 2011 to 2018 – the works on the highway will take place, and the remaining 18 years of the contract will see that new standard being maintained.

The three companies bidding for the 25-year contact, Amey, Carillion and Colas, have been in negotiations with Sheffield Council for nine months.

In July this year, after the three bids have been evaluated, the council plans to invite two of the three bidders to submit "refined solutions" for the project.

Following a further period of evaluation, the preferred bidder will then be selected in spring 2011 and begin work on the scheme in August next year.

Mr Mothersole added: "The dialogue with the bidding companies has been highly productive.

"We have been pleased with the level of commitment they have shown and are confident that they have an excellent understanding of the city's requirements.

"This investment and programme of works will transform our city and provide enormous benefits for all residents, visitors, businesses and motorists."

Back in March 2008 Sheffield Council was selected, along with the Isle of Wight Council and the London Borough of Hounslow, as a "highway maintenance pathfinder" and invited to submit an outline business case to the Government's Department for Transport (DfT).

In March last year, the Government then agreed to fund the full amount which had been requested by Sheffield Council to pay for the work to be carried out.

The money will be paid to the council as a grant, in PFI "credits" and will help pay for the contract, which will run from 2011 to 2036.

Once the 25-year contract begins, Sheffield Council will also invest an additional 10m in the scheme each year.

In addition to physical improvements on the highway network, "Streets Ahead" will also plough money into other services such as streetlighting, winter gritting and landscape maintenance.

As part of the scheme, meetings will also be held with members of the public through Sheffield's community assemblies, to discuss initiatives such as reducing the city's carbon footprint.