A joint venture of Carillion and Equitix joint venture (JV) has won the tender process for the Priority School Building Programme (PSBP) private finance batch in the Midlands region, in UK.

The team beat out competition from the two other shortlisted bidders: Bam PPP and an Interserve/Kajima JV.

Carillion/Equitix JV will finance, design, build and provide hard facilities management for the eight schools that comprise the Midlands Private Finance Batch under the PSPB.

This project forms part of the Government's £750 million PSBP through which the Education Funding Agency is procuring projects to renew those parts of the schools estate in England that have been prioritised for replacement or upgrading.

The total project investment is estimated between £100 million (US$156.8 million) and £150 million (US$235.2 million).

Carillion expects to invest up to approximately £9 million of equity in the project from which the firm also expect to generate construction and services revenues of approximately £190 million (US$298 million) over the life of the 27-year construction and concession contract.      

Operis was the financial advisor of the Carillion/Equitix JV. Operis will assist in obtaining an investment grade credit rating for the project and raising senior debt finance from the priority schools aggregator.

The project will improve education facilities and outcomes for the pupils and staff in eight schools, by replacing substandard buildings and providing excellent facilities to support teaching and learning. The schools involved in this batch are the following:

• Alfreton Grange Arts College, Derbyshire
• ARK Kings Academy, Birmingham
• Greenwood Academy, Birmingham
• Plantsbrook School, Birmingham
• President Kennedy School, Coventry
• The Phoenix Collegiate, Sandwell
• The Queen Elizabeth Academy, Warwickshire
• Top Valley Academy, Nottingham

Carillion Chief Executive, Richard Howson said:

"We are delighted that we have been appointed as the Selected  Bidder for the Midlands Private Finance Batch under the Priority School Building Programme. Carillion is a market leader in the education sector having delivered around 180 new schools and academies through a combination of privately and publicly financed projects and we look forward to working closely with the Education Funding Agency and the schools to create excellent facilities for pupils and staff."

"This is the second major PPP project in the UK for which we have been selected as the preferred bidder this year, following  our success in being selected for the Aberdeen Western Peripheral Route in which we will invest some £20 million of equity and from which we expect to generate around £175 million of construction revenue."

This project is the batcht number 5 of the PSBP. The other four batches are the following:

• Batch 1 - Priority School Building Programme (Hertfordshire, Luton and Reading)
• Batch 2 - Priority School Building Programme (North East)
• Batch 3 - Priority School Building Programme (North West)
• Batch 4 - Priority School Building Programme (Yorkshire)