A NORTH-EAST council has awarded construction company Sir Robert McAlpine a multi-million pound contract to run its roads network.

Officials believe the deal, which may be worth as much as £50m, will lead to improvements in road quality.

Redcar and Cleveland Borough Council's 60-strong workforce will transfer to McAlpine, which will assume responsibility for 550 miles of road.

The contract covers a wide range of maintenance and improvement works that will be carried out by McAlpine Government Services, the highways services business of McAlpine Infrastructure Services.

The contract is a further vindication of McAlpine's decision to set up a specialist division to provide highways maintenance and related professional services to local authorities and the Highways Agency.

The package is worth about £7m a year for an initial contract period of three years.

If both parties are satisfied with the way the contract is working, the deal could be extended. Ultimately, the agreement could be worth about £50m. Cabinet member for strategic planning, development and infrastructure Councillor Eric Empson said: "We are delighted to have struck this partnering contract with McAlpine and hope it continues for many years to come.

"It means that Redcar and Cleveland will, in future, have the benefit of the expertise and experience of a major highways services provider."

Alan Garner, managing director of McAlpine Government Services, said: "It marks an important milestone in establishing McAlpine as a service partner and provider in the North-East and we are very pleased to have secured the opportunity."

Preparations for the deal began in November last year and since last month, detailed discussions have been taking place between a team of council officers and McAlpine executives to deliver the final contract, which begins on Thursday.