Tube Lines deal shapes up Jarvis

SHARES in Jarvis leapt almost 20% today, up 5¼p to 33p, after the deeply troubled engineer and maintenance group gave its strongest indication yet that it may be out of the woods.

After months of fears of financial collapse, the company today said it had finalised the £146m sale of its stake in the Tube Lines maintenance company and closed financial agreements to pull out of 14 high-profile, Private Finance Initiative projects whose cash problems have hobbled the company.

Jarvis, headed by Steve Norris, also said it has agreed a £110m deal to oversee the final construction of the projects and its exit from the schemes.

The agreements should see an end to such controversially delayed projects as the Whittington Hospital expansion in north London, university accommodation in Greenwich, a new library and school in Croydon and upgrades at six schools in Twickenham.

Work has been at a standstill at the projects after employees walked off site in protest at Jarvis's failure to pay them.

New chief executive Alan Lovell said: 'The completion of these three inter-related transactions draws a line under Jarvis's troubled financial history and enables us to focus on the future development of our promising core business of rail, roads and plant hire.'

Of the PFI projects, Lovell said: 'We will be completing all construction work and bringing this activity to a close.'

Jarvis has had to quit its part-ownership of the Underground maintenance company because of its cash problems, selling its one-third stake to co-owner Amey, the once near-bust construction company rescued in 2003 by Ferrovial of Spain.