Transport Scotland has confirmed that the IMCD consortium – made up of Sir Robert McAlpine, Iridium Concesiones de Infrastructuras SA and Carillion - has given notice that Carillion had decided not to proceed.
The third shortlisted bidder, New Borders Railway, quit when Fluor dropped out in November. Its other members were Miller Construction and Uberior Infrastructure Investments, part of Lloyds Banking Group.
The project is to reopen a 30-mile stretch of the former Waverley line from Edinburgh to Tweedbank, south of Galashiels.
A Transport Scotland spokeswoman told The Scotsman : "We remain on target to announce our intention to award the contract to a preferred bidder and for works to be under way in winter 2011. Expected construction completion, with passenger services running, continues to be 2014.
"IMCD has made us aware that one of its consortium members, Carillion, has decided not to continue in the tender competition for the Borders Railway. We await formal confirmation of any proposed changes to its consortium. Changes to groupings and consortia during procurement are not uncommon, particularly on large-scale projects where the timescales for tendering and construction are lengthy.
"Our procedures are designed to accommodate this and any changes will ensure, consistent with procurement law, that any restructured group has the requisite capability to remain in the competition."
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