IBM wrests vehicle charge contract from Capita

LONDON (Reuters) - Transport for London (TfL) said on Thursday IBM (IBM.N) would administer the capital's congestion charge from 2009, beating two other bidders, including current provider Capita Group (CPI.L).

"IBM's submission to operate the London Congestion Charging scheme has been selected as it best meets TfL's operational and technical requirements," TfL said in a statement.

The country's biggest back-office company, Capita, was the biggest FTSE .FTSE loser in a strong broader market as its shares fell as much as 10.5 percent in strong volume after the company lost the contract.

"We are disappointed not to have delivered the next stage of congestion charging for TfL," Capita, which generates around 56 million pounds in revenue a year from the contract, said in a statement.

Cazenove analysts estimated the firm would have made revenues of 60 million pounds in 2009 from the contract, which would have translated to a profit of 10 million pounds, or 3 percent of forecast pretax profit for the year.

TfL said IBM would also administer the low emission zone, which begins in February 2008. It aims to deter high polluting vehicles being driven in London by imposing charges on diesel-engined lorries, coaches, buses, vans and minibuses that do not meet the standards.

The third bidder was the Thales Alliance, made up of Thales Information Systems, Accenture (ACN.N) and Vertex Data Science.

By 2 p.m., shares in Capita were down 4.6 percent at 707 pence with 15.5 million shares traded compared with average full day volume of 4.2 million shares traded over the past 30 days.

TfL oversees London's public transport network as well as administering the congestion charge that spreads from Earl's Court in the west to Whitechapel in the east.