Skanska taken over

In our March edition we looked into the way that Somerset County Council Highways was working. Or not as the case maybe. SCC Highways use Skanska as the contractor to carry out most of the works the Highways team have to deliver. Our article looked at the performance of the company in the light of an audit report published by SCC. The full text was made public only reluctantly. It revealed significant problems with the Skanska contract. Including routine over-charging of Somerset County Council.

Yesterday it was announced that Skanska UK’s infrastructure services has been sold. This is the bit that works for SCC and Devon, North Somerset, Gloucestershire, Hampshire, and several others. The operations have been bought by M Group and a new division formed including the Skanska business. the new unit is to be known as Milestone Infrastructure Ltd.

M Group Services delivers appear to be building a portfolio of infrastructure contracts with public bodies. It is not a new model and one that has been followed by organisations such as Capita and Carillion. They already have around 9,000 employees working from 100 locations.

Jim Arnold, chief executive, M Group Services, apparently hasn’t been made aware of the SCC audit report. He told journalists “We are acquiring a highly-regarded infrastructure service business with a first-class reputation for strong and innovative service delivery across its longstanding client base.”

Assuming the contract with Skanska was drawn up sensibly, it should have a break clause in it. This would be enacted whenever the contractor changed ownership. It would give both sides the option to renegotiate or walk away. So as a result, SCC would now have a chance to renegotiate the terms of the contract with an option to walk away.

We can only wonder if this is happening.

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