Costain Group PLC (LON:COST) has won a place on an eight-year contract framework to carry out work for Anglian Water.
Along with three other companies on the £350mln ‘strategic pipeline alliance’, the construction group will help with projects including creating a new 500km network of interconnecting pipelines and infrastructure to move water from areas of surplus in Lincolnshire down to the drier south and east of the region
“By bringing together and integrating our programme management consultancy, digital twin expertise and complex programme delivery capabilities, Costain, as part of this newly formed alliance, will help Anglian Water as it strategically addresses the challenges it faces in this dry region,” said Costain chief executive Alex Vaughan.
This framework contract win follows a smaller contract framework appointment for the group with Yorkshire Water last week, a £4.5bn roads improvement group in April and the green light for work on HS2 contracts in the same month.
The expected Anglian Water order book value for Costain is around £90mln and the annual contact value is roughly £11mln, analysts at Liberum said.
“We expect the contract to be a mixture of higher margin digital and lower margin complex delivery and therefore assume a margin in the middle of the target ranges, i.e. 5-6%,” the analysts said.