THE troubled private company running some of Bournemouth Council’s services is £87m in debt, it has been revealed.

Controversial infrastructure and maintenance group Mouchel has agreed to sell its rail business to an Australian rival.

The move is part of a strategy to cut its huge debt amid what have been described as “crisis talks” with banks.

Last year Bournemouth transferred four departments to Mouchel in a programme known as outsourcing.

And last week, as council bosses consider handing more services to the company, a senior officer was suspended for raising concerns with councillors via email.

Stephen Parker warned of “serious doubts about the value for money and deliverability of the contract.”

The disposal of the rail business is expected to be the first of many as Mouchel tackles its debt problem and tries to reassure lenders and the markets over its financial position.

Cllr John Beesley, deputy leader of Bournemouth Council and cabinet member for resources told the Echo he had “confidence in the ability of Mouchel to deliver on its contract with us.”

He added: “We are keeping a close eye on developments and we are aware that they are disposing of some non-core assets and we are pleased to see that happening.”

He said the council would not sign off on transferring human resources and financial services to Mouchel until more due diligence had been carried out.

As part of that, council bosses are waiting to see the results of a KPMG report into the state of the company.

Stock market analyst David Brockton of Espirito Santo said of the rail sell off: “This divestment… does not materially alter the group’s current predicament.”

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Mouchel signed a £150m, 10-year-deal in December 2010 to run four council departments.

They are: revenues, benefits, ICT and facilities management.

Those behind the scheme said it would be a “win-win” scenario under which costs could fall by nearly six per cent a year and services would be guaranteed to improve services to rank among the top 25 per cent in the country.

Even as Mouchel faced takeover bids and speculation about its financial health, one of its bosses, Tony Williams, insisted the company was “not going bust” and could take over two or three more council departments.

The next two departments in line for transfer are human resources and finance.

In the summer of 2011, Kinetics, the company responsible for maintaining the council’s housing stock, went into administration, and the council transferred the administration of that service to Mouchel.