Infrastructure support service provider Amey has reached an agreement to pay £215m to terminate its Birmingham highways maintenance PFI contract.

Amey will pay £160m in 2019 and the remaining £55m over the next six years. The organisation is owned by the Spanish infrastructure firm Ferrovial.

Under the deal, Amey will continue to deliver services until a replacement contractor is identified to provide those on an interim basis until at least 30 September. The period may be extended until 31 March 2020.

A joint statement from Birmingham City Council and Amey said: “All parties will be working closely in the coming months to ensure the smooth transition of services and staff.”

Ferrovial said the agreement does not have any impact on its profit and loss account.

In August 2009, Birmingham City Council announced Amey as the preferred bidder for its £2.7bn highways maintenance and management private finance initiative (PFI) contract.

Under the contract, Amey was responsible for improving and maintaining Birmingham’s highway infrastructure, including 2,500km of road network, approximately 100,000 street lights, as well as more than 850 highway structures and bridges across the city.

However, severe concerns were raised in 2014 on the quality of the work and the investment decisions made by Amey leading to court disputes.

Both parties have now come to the conclusion that cancelling the agreement will be the best option.