Capita lose £60 million charging contract

Source: Supply Chain Exec

Date :26/10/2007 09:55:01

Capita has lost the £60 million a year contract to operate London's congestion charge from 2009.

Transport for London (TfL) announced that it has handed the next five-year contract to run the system to information technology giant IBM.

TfL said IBM's bid for the business was the "most economically advantageous".

Share drop

Shares in Capita tumbled ten percent on news of the contact loss, although they later recovered a little to close six percent, or 41p, down at 700p.

The contract was worth £60 million a year in revenues to Capita - around three percent of the group's total annual revenue.

The decision comes after a 12-month competitive tender process, which saw Capita pitch against IBM and the Thales Alliance consortium, comprising Thales Information Systems, Accenture and Vertex Data Science.

Capita said it was "disappointed" to lose the business, which will also see IBM pick up the contract to run the low emission zone due to be launched next February with phased introduction through to January 2012.

Disappointment

Capita added: "We have delivered an exceptional service, constantly meeting TfL's requirements as the service has evolved and we will continue to deliver the current service until the end of our contract in November 2009."

The group has run the congestion charge system since February 2002, with the scheme going live the following February.

The congestion charge was expanded further to the west of London earlier this year and now brings in revenues of around £123 million a year for TfL.

October 26, 2007

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