Costain Group Regulatory News (COST)

15 April 2020

Costain Group PLC

("Costain" or the "Group" or the "Company ")

Update on Contracts - High Speed 2 and Highways England

Costain confirms that its joint venture company, Skanska Costain Strabag, ("SCSJV") has been granted notice to proceed by High Speed Two (HS2) Limited ("HS2") to commence full detailed design and construction of Phase 1 of the HS2 railway in area south as part of the Main Works Civils Contract. 

The contract, worth £3.298 billion to the joint venture as a whole, will involve the design and construction of major tunnels in the approach to the London terminus at Euston station. It is estimated that Phase 1 of the works will create 6,000 jobs.

To date, the joint venture's contract with HS2 has been to undertake scheme design and site preparation for the civil engineering work. The new contract marks the point where the work transitions from scheme design and preparatory work to full detailed design and construction.

Currently, in response to the COVID-19 situation, construction on site is paused for all but safety-critical works for the health and safety of employees and the communities in which they work. Given the delayed start, the contract is not expected to make a significant contribution to the Group's profitability until FY21 onwards.

Separately, Costain has been awarded a £210 million design and build contract by Highways England to upgrade an existing section of the A30 north of Truro, Cornwall. The scope of work includes the upgrading of an 8.7-mile section between Chiverton Cross and Carland Cross from a single carriageway to a dual carriageway, together with the construction of new grade-separated junctions, slip roads and bridges. Detailed design will commence in April 2020 with works commencing in the coming months. The new upgrade is expected to be open for traffic by the end of 2023.

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Costain helps to improve people's lives with integrated, leading edge, smart infrastructure solutions across the UK's transportation, water, energy and defence markets. We help our clients improve their business performance by increasing capacity, improving customer service, safeguarding security, enhancing resilience, decarbonising and delivering increased efficiency. Our vision is to be the UK's leading smart infrastructure solutions company. We will achieve this by focusing on blue chip clients whose major spending plans are underpinned by strategic national needs, regulatory commitments, legislation or essential performance requirements. We offer our clients leading edge solutions that are digitally optimised through the following five services which cover the whole lifecycle of their assets: future-shaping strategic consultancy; consultancy and advisory; digital technology solutions; asset optimisation and complex programme delivery. Our culture and values underpin everything we do.

For more information visit www.costain.com