A STRATEGIC alliance between two of the region's biggest building contractors has been formalised, allowing the new partnership to compete for some valuable civil engineering contracts.

Hall Construction, of Newton Aycliffe, which employs 340, and Lumsden and Carroll Construction, of Esh Winning, employing 280, have joined forces to compete for long-term contracts with local authorities in the region.

The two firms have a combined annual turnover of £64m.

John Davies, deputy managing director of Lumsden and Carroll, said: "In the North-East, 40 per cent by value of current construction business is coming from the public sector, with the majority of work increasingly carried out within long-term partnership or PFI agreements.

"Yet 90 per cent of the region's construction firms are SMEs with less than 250 employees which are unable to compete for these major schemes.

"With this alliance, we can compete with the very biggest players in the industry and realise the efficiencies and economies of scale that only large organisations enjoy."

Stephen Hall, managing director of Hall Construction, said: "This alliance agreement, under which we both retain our independence, allows us to be in the driving seat for work on major construction schemes.

"We can now compete with the very largest national companies in our own region, ensuring that local work remains with local people."