Road and rail maintenance creates new infrastructure opportunities

Two key markets for civil engineering contractors – road and rail maintenance – are creating some good opportunities for new work in the infrastructure sector.

One of Britain’s largest civils contractors, Balfour Beatty, recently highlighted the positive outlook for both these sectors when it reported first-half results.

It follows a recent upturn in detailed planning approvals across the wider infrastructure sector and chimes with predictions published in June in the Glenigan Construction Industry Forecast 2023-2025 that civil engineering starts are set to rise by 11% next year.

Budget increases

Driven by concerns over poor roads and potholes, the highways maintenance market is part-way through a five-year, £2.7 billion scheme for road patching, which has seen local council budgets increase by around 50%. Balfour Beatty has picked up local authority contracts for Buckinghamshire and East Sussex in the last year and believes it is ‘well-positioned’ for other local authority contracts in coming years.

The highways maintenance pipeline provides opportunities for contractors to pursue contracts of varying sizes across the country. For example, applications to tender are currently being invited for the Milton Keynes Highways Term Service Contract, which involves term maintenance and capital works projects across the town worth £350 million. The contract is due to run for eight years and is set to get underway this autumn (Project ID: 23156453).

Glenigan data highlights other significant highways maintenance contracts/frameworks where tenders are currently being invited. These include a maintenance framework in Manchester worth £32 million (Project ID: 23197489); a highways term maintenance contract across Rutland in 2024-34 based in Oakham worth £74 million (Project ID: 22441223) and a highways maintenance & improvement contracts framework for North Somerset Council worth £32.5 million set to run from spring 2024 (Project ID: 23042471).

Rail work on track

The outlook for new work in the rail maintenance sector is also promising thanks to the government’s commitment to invest £44 billion in operations, maintenance, and renewal over 2024-2029 as part of Network Rail’s Control Period 7 strategic business plan.

Glenigan data highlights the scale of some of the rail maintenance contracts and frameworks available to civils contractors.

Contracts have recently been awarded for Network Rail’s Wales & Western Rail Framework under CP7 which will be worth £2 billion. It will involve numerous civils contractors on a maintenance and renewals programme set to run for five years from next spring (Project ID: 22123595).

Meanwhile, applications to tender are underway for Network Rail’s £1.3 billion Manchester-based Railway Works Framework covering the North West and Central Region under CP7. The framework starts next spring and will run for five years (Project ID: 22163605).

In the East of England, Network Rail in Norwich is seeking to appoint 14 construction partners under five lots for the £4 billion CP7 Eastern Region Renewals and Minor Enhancements which is set to get underway later this autumn (Project ID: 21447871).

The bright outlook for road and rail maintenance comes as the work pipeline across the wider civils sector is showing signs of improvement helped by the go-ahead for more major projects (valued at over £100 million). Glenigan data shows detailed planning approvals for infrastructure were worth £1,526 million in the three months to July, up 33% on the period a year ago.