The Enquirer understands that a deal with the Interserve/Kier joint venture has been terminated following a six month Early Contractor Involvement period.
Sources told the Enquirer that both sides were unable to agree a price.
One said: “The contractors told the client that the job was unaffordable at the current budget of £100m and it should be nearer the £115-£130m mark.
“It seems Severn Trent weren’t going to budge and the contractors did the sensible thing and walked away.”
It is understood Severn Trent is now talking to other contractors with North Midland believed to be among the front runners.
The Frankley upgrade is part of Severn Trent Water’s Birmingham Resilience Project worth a total of £300m.
Severn Trent Water said it does not comment on individual suppliers.
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