Balfour Beatty built the original £127m extension to Birmingham’s New Street station which opened last month after a series of delays.

But Balfour has missed out on a place on the alliance which is described as “a dramatic departure from traditional contracting methods.”

The alliance comprises the West Midlands Combined Authority (WMCA) which owns the Midland Metro light rail line, infrastructure contractor Colas Rail and its partners Colas Ltd, Barhale, Thomas Vale and Auctus Management Group, and a consortium of consultancies Egis Rail, Tony Gee and Pell Frischman.

Councillor Roger Lawrence of WMCA said: “Alliancing agreements are a dramatic departure from traditional contracting methods as staff work as an integrated team and tie the commercial objectives of all parties to the actual outcome of the project.”

Work is already underway on a short Midland Metro extension from Birmingham New Street station to Centenary Square, with services expected to start running in 2019. Funding has also been earmarked to extend this line to Edgbaston by 2021.

Last week planning was granted for an £18m extension of the tram route to Wolverhampton.

Midland Metro Alliance Director, Iain Anderson said: “The scale of the proposed development programme, and the commitment to a 10-year duration provides us with a unique opportunity to develop efficient bespoke solutions, build long-term relationships with key stakeholders and to play a major role in the enhancement of the communities within which we will be operating.”