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New deal in Canada could bring £870m to outsourcer Serco

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August Graham, PA City Reporter
·2-min read
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Serco has won a contract to run the civilian parts of a Canadian military base, in a deal which could be worth up to £870 million to the British outsourcing giant.

The company said it had been selected after an open tender process to provide support services for the 5 Wing Canadian Forces Base in Goose Bay, Canada.

The deal initially stretches for 10 years and has an estimated top value of 694 million Canadian dollars (£401 million).

However, the contract’s terms also include the option to extend it twice for five years each time, bringing the total ceiling value to around 1.5 billion Canadian dollars (£866 million).

Serco has been doing business at 5 Wing Goose Bay since 1998, and is already one of the biggest private sector employers in the area.

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The base covers more than 200,000 square metres, and includes 115 buildings, two runways and a large training complex.

Serco chief executive Rupert Soames said: “Goose Bay has been operated successfully by Serco for more than 20 years and we are delighted to have been selected to continue to support the Canadian Department of National Defence on what is a vital piece of national infrastructure.

“I am very proud of the work we have done there, including both the service delivery to the Canadian Armed Forces and Serco’s work with the local community. The new contract will allow us to build on both of these areas.”

The contract will give Serco responsibility for the base’s air traffic control systems and maintaining navigational aids.

It will also, among other things, provide firefighters to the base, deal with hazardous waste, manage the IT systems, central heating and food services, as well as security.

The announcement on Wednesday morning sent shares in the Hampshire-based FTSE 250 company up 1.8%.