Carillion Plc Regulatory News (CLLN)

8 October 2012

Carillion selected for "Green Deal" energy services contract worth up to £1.5 billion

Leading integrated support services company Carillion has today announced it has been named as the preferred bidder for the Birmingham Energy Savers (BES) scheme. This contract is a major milestone in establishing the Green Deal programme and in Birmingham's ambition to drive the low carbon economy and create green jobs.

The eight-year BES contract is estimated to be initially worth up to £600 million, but has the potential to be extended to the wider West Midlands area under a framework agreement worth up to £1.5 billion over eight years.

Under the BES scheme, Carillion will work with Birmingham City Council as its exclusive delivery partner to improve the energy and carbon efficiency of up to 60,000 households across the City, together with schools and other non-domestic Council properties. The scheme will give households affordable ways of improving their properties by fitting energy efficiency measures, such as insulation and new boilers under the UK Government's Green Deal. The Green Deal allows the cost of installing energy efficiency measures to be recovered in installments through energy bills at no cost to home owners, where savings on energy bills equal or exceed the cost of improvement work. Homes where savings are insufficient to cover the cost of improvements may be eligible for improvements under the Energy Company Obligation. As part of the Birmingham Energy Savers scheme, Carillion will also launch a programme to install its innovative EcoPod heating system to tackle the heating and hot water challenges of tower blocks across the City to help reduce fuel poverty.

In partnership with Birmingham City Council, Carillion will also have the opportunity to extend the provision of energy efficiency services to up to 35 other councils and public sector organisations across the wider West Midlands area who were party to the original procurement notice and who can therefore take advantage of these services under a framework agreement, without the need for further competitive tenders.  

The UK Government has today announced additional funding of £2.6million in 2012 to assist the Birmingham Energy Savers scheme, as part of its Core Cities Go Early incentive to help kick-start Green Deal.

As a pioneering approach to the Government's Green Deal programme, the announcement is seen as a major milestone in Birmingham's ambition to drive the low carbon economy and create green jobs. As part of the partnership, Carillion has committed to create and sustain at least 360 jobs and to help 600 people from priority groups into placements, training and jobs, many through its own investment and skills training as well as by encouraging its business partners to invest locally in a range of new green energy facilities.

Commenting, Carillion's Chief Executive Richard Howson, said: "Birmingham Energy Savers is a genuinely ground-breaking contract and we are delighted to be named as Birmingham City Council's preferred delivery partner. As well as demonstrating the increasingly important role that energy efficiency services are playing in the economy, this contract highlights the benefits of having a leading independent energy efficiency services capability.

"I believe our leadership in developing a sustainable business also played a key part in this success. By engaging with our supply chain partners, particularly local small and medium-sized businesses, and with social enterprises we can deliver service solutions that create jobs and offer training and development opportunities to support the economic and social development of the communities in which we operate.

"This is the first of a number of major contracts of this kind that Carillion is either bidding, or expects to bid, under the Green Deal or Energy Company Obligation, and we expect to continue to play an active role in helping to develop this exciting new market."

Energy and Climate Change Minister, Greg Barker, said: "Birmingham City Council is really taking the lead in reducing fuel poverty and making Birmingham cleaner and greener. The Green Deal will be a vital tool in helping the City reach its ambitious targets, allowing people to get energy efficient upgrades to their home and save money in the process. The funding we have given Birmingham will help kick-start the Green Deal and I'm excited by the Council's plans to transform buildings and save energy."

Birmingham City Councilor, James McKay, Cabinet Member for a Green, Safe and Smart City, said: "We have signed a preferred bidder letter with Carillion plc for the Birmingham Energy Savers scheme. This decision represents a major milestone in Birmingham's green ambitions, and demonstrates that the social justice and environmental agendas go hand-in-hand with each other.

"It will reduce energy bills for citizens by up to £300 per year - taking up to 40,000 people out of fuel poverty by 2015 - create jobs in the technology supply chain and ensure that there are less carbon emissions from the City."

For more information

John Denning, Director Group Corporate Affairs, Carillion plc + 44 (0) 1902 316426

Finsbury

James Murgatroyd or Gordon Simpson +44 (0) 207 2513801

Notes to Editors

Carillion is a leading support services company with a substantial portfolio of Public Private Partnership projects and extensive construction capabilities. The Group has annual revenue of around £5 billion, employs around 45,000 people and operates across the UK, in the Middle East and Canada. The Group has four business segments.

Support services - this includes facilities management, facilities services, energy services, utility services, road maintenance, rail services and consultancy services.

Public Private Partnership (PPP) projects - this includes our investing activities in PPP projects in our chosen sectors of Defence, Health, Education, Transport, Secure and other Government accommodation.

Middle East construction services - this includes our building and civil engineering activities in the Middle East.

Construction services (excluding the Middle East) - this includes building, civil engineering and our development activities in the UK and our construction activities in Canada.

This and other Carillion news releases can be found at www.carillionplc.com