Business Weekly - Cambridge, UK

New contracts, or renewal of existing contracts, were won by AWG’s three infrastructure management divisions: utility services, government services and project management services.

Approximately 50 per cent of the revenue is expected to be generated within the first 12 months, with the balance spread over two to five years. The largest single contract is in the government services division for Birmingham City Council, following the acquisition in March of the repair and maintenance contracts for housing and property in the city.

The £250m contract is expected to generate £50m per annum over five-years.

Elsewhere, utility services successfully renewed a three-year, £9m per annum contract in the water sector.

Project management services’ gains include a two-year, £38m per annum contract to construct 7.2km of new road and “associated structures” in Scotland.

AWG, which saw off a hostile bid from German bank WestLB last month, has undergone a succesful re-invention as a manager of large infrastructure projects after it became apparent that the regulated water business would not deliver long-term growth.

It has transferred engineering and IT skills developed within the water business to the management of networks of pipes, roads, telecoms cables and gas mains, for example.

AWG also announced that it agreed terms with former chief executive Chris Mellor, who was ousted from the company in March, having lost the confidence of the board.

Mellor will receive an initial cash payment of £142,000 and certain benefits, including private healthcare and the use of a company car. He will then receive monthly payments of £26,302 up to a maximum of 9 payments.

Mellor also has the right to receive an immediate pension of £162,000 per annum. AWG is required to augment Mellor’s pension fund to a value of £822,000.

AWG is thought to have a shortlist of around six candidates to replace Mellor.