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Romec deal expands Balfour Beatty in FM

31 Mar 11 Balfour Beatty is taking complete ownership of Romec Services Ltd (RSL), the external trading arm of its Romec facilities management joint venture with the Royal Mail Group.

Romec itself, 51% owned by Royal Mail and 49% by Balfour Beatty, has agreed a new facilities management contract with Royal Mail Group for a further 10 years. Its RSL arm, however, now comes under Balfour Beatty ownership.

Romec was established in 2002 to provide technical and building services to Royal Mail, Post Office and Parcelforce Worldwide buildings, including electrical, plumbing, security and cleaning services. It generates approximately £150m of revenue a year.

Under the new services agreement, which will come into effect from April 2011, Romec will provide contracted services to Royal Mail Group worth £900m with further variable scope for works worth up to a further £900m over the 10-year term.

RSL is Romec’s external trading business and provides mobile engineering and maintenance services to third-party customers such as Sainsbury’s, Asda, BBC, British Museum and Camelot. Balfour Beatty said that RSL’s £36m revenue and £13m gross assets would support its growth plans in the facilities management sector.

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Balfour Beatty chief executive Ian Tyler, said: "The joint venture we have developed with Royal Mail Group is now entering a new and exciting phase. We are delighted to develop the new Romec organisation from a tactical supplier to one of Royal Mail's key strategic partners, supporting its transformation programme.

“We are also excited about the opportunity to develop RSL. The combination of RSL’s engineering skills and the breadth and resources of our support services business can enhance our service delivery model and capitalise on the potential growth in facilities management."

Mark Higson, Royal Mail’s managing director of operations and modernisation, said: "We are very pleased to be extending our joint venture with Balfour Beatty. The provision of effective and highly efficient services in our buildings plays an important role in ensuring our people provide the best possible services at competitive prices to all our customers."

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