Bear struggles to grapple with competitive tendering process

Bear ScotlandIncreased competition has contributed to a fall in turnover and profits for road maintenance provider Bear Scotland.

Accounts filed at Companies House revealed that Perth-based Bear’s revenues fell 18 per cent to £73.7 million in 2015.

A 64 per cent slump in pre-tax profits to £1.5m was attributed to the “very competitive” fourth generation contracts tendering process.

The figures also revealed that the number of people employed by the company dropped from 631 to 529 in 2015.

Bear firm lost its contract to operate trunk roads in the south east of Scotland to rival Amey but did secure two deals to run roads in the north-east and west of Scotland.

The firm won an initial five-year tender to maintain roads from Campbeltown to Thurso and Wick in 2013. The so-called “fourth generation” contract for the north-west region has scope for a further five-year extension.

A year later, incumbent Bear won the tender for north-east roads, stretching from Stirling and Dunfermline through Aberdeen, Fraserburgh and Inverness for a six-year stint with a possible two-year extension, but lost the south-east franchise. At the time, Bear Scotland pledged to invest £6m in new fleet to cover the area. All of the tenders were handled by Transport Scotland.

According to the accounts, Bear added that while it achieved targets set out for the north-east contract, it “experienced some operational difficulties” meeting targets in the first year of the deal.

A spokesperson for BEAR Scotland told Scottish Construction Now: “Between January 2014 and 16 August 2014, BEAR Scotland was responsible for the management and maintenance of three trunk road contracts; the North East, South East and North West. The company’s annual turnover fell in 2015 as a result of BEAR Scotland being responsible for only two trunk road contracts; North East and North West.

“The pre-tax profits of the company in 2015 are based on the company operating the new Fourth Generation trunk road contracts for the North East and North West.

“These new contracts were bid in an extremely competitive market and therefore the reduced margin is not surprising given the rigorous requirements of these contracts, as well as our increased costs in the delivery of the services. Whilst we expect this position to improve these contracts offer excellent value for money for our client Transport Scotland, and we will continue to work with them closely to provide a high-quality service.”

The publication of the accounts comes after an Audit Scotland report published earlier this month that called for “urgent action” to improve roads in Scotland.

The audit body said Transport Scotland had shaved £24m from its spending on structural maintenance of motorways and trunk roads in 2014-15, while the proportion of roads it managed that were in “acceptable condition” fell from 90 per cent to 87 per cent over the last three years.

Bear Scotland firm is owned by Eurovia, a division of French construction conglomerate Vinci; Jacobs, a multinational, US-based engineering firm; and the UK’s Breedon Aggregates.

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