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United Utilities awards first maintenance outsourcing contract to Costain

Costain said the five-year contract will be worth roughly £35mln per year and has an option to extend to ten years

water leak
Costain says it will use technology to be more proactive with maintenance

Civil engineer Costain Group PLC (LON:COST) has won a five-year contract to be the only provider of maintenance services across the whole United Utilities Group PLC’s (LON:UU.) network.

In what is the first time that United Utilities has outsourced its maintenance activities, Costain will start maintaining 96 water treatment facilities and 575 waste water treatment sites from June 2019.

READ: Costain chief bows out with record order book

The contractor said it will use technology to help United Utilities “move from a reactive 'fix-on-fail' approach to a proactive maintenance programme” to try and improve the resilience of its assets and ensure continuity of supply.

Costain said it has begun to prepare for the contract, which is expected to be worth roughly £35mln per year throughout the duration of the contract and has an option to extend to ten years.

Chief executive Alex Vaughan, who was promoted to the top job earlier this year as Andrew Wyllie retired after 14 years, said: “By integrating our programme management, asset optimisation and technology capabilities, Costain will help United Utilities to support its business transformation. 

“Our integrated services and use of digital technology will help to deliver a step change in business performance and operational efficiencies for United Utilities.”

Shares in Costain were up 2% at 308p on Monday morning, while those in UU were barely moved at 806.4p.

Quick facts: Costain

Price: 190 GBX

LSE:COST
Market: LSE
Market Cap: £205.74 m
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