MITIE is set to win a £170 million contract to provide services ranging from cooking school meals to maintaining buildings for the City of Edinburgh Council.
The outsourcing specialist beat off competition from other private sector players including Capita and Carillion to be appointed preferred bidder to deliver Integrated Facilities Management services for seven years.
In a report prepared for the council, its chief executive Sue Bruce said a "compelling business case" existed to adopt a partnership model with the preferred bidder.
The council expects the proposal developed by Mitie to generate £51.5m of savings over the term of the contract. It said this will provide an additional £13.5m of savings compared with those offered under a plan to improve the delivery of services while keeping them inhouse.
Around 2000 council employees will transfer to a new subsidiary of Mitie which will be established to deliver the contract, called Vital Edinburgh.
Their terms and conditions of employment will be protected under TUPE regulations.
A Council spokesperson, said: "It is anticipated a number of efficiencies would be implemented if MITIE were to take on the contract with redundancies being as a last resort."
Under the approved proposal, Mitie expects to create 200 additional jobs over the life of the contract.
The council will vote on whether to approve the appointment at a special meeting next week.
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