Capita loses London Congestion charging to IBM

IBM has won the renewal contract for the London Congestion Charging from Capita. This must be a huge blow to Capita as CC was a flagship contract which had enhanced their reputation and, indeed, they were looking to replicate it in other cities. Capita shares have already fallen 7% on the 'surprise' announcement.

IBM's five year contract for the operation of the Congestion Charging and Low Emission Zone will start in Nov 09. The existing contract was worth c£60m pa to Capita and was estimated (at £10m) to contribute about 3% of Capita's profits in 2009.

Graeme Craig, interim director of Congestion Charging at TfL, said: "IBM's submission to operate the London Congestion Charging scheme has been selected as it best meets TfL's operational and technical requirements. It was also the most economically advantageous, which is important as net proceeds from Congestion Charging are invested in transport within London. We expect to continue our excellent working relationship with Capita over the next two years".

More later.