Sunday, June 28, 2009

Construction college put on hold

Plans to revamp the National Construction College have become the latest victim of the funding-crisis engulfing the Learning and Skills Council.

Redevelopment plans costing ВЈ26m for construction's main training college failed to make it onto the LSC's shortlist of 13 schemes as part of the Further Education capital funding programme.

Backers of the NCC will have to resume their fight for cash in the autumn when the LSC will start drawing up funding plans for the next spending review period starting in 2011-12.

The NCC is one of 79 projects which had already received approval in principle from the LSC before a huge hole was discovered in its finances.

Andy Walder, NCC Director, said: "If we can not find funding for this project it means a huge loss for both industry and the region. The NCC is of major national and regional significance, delivering unique training that is not available, and can not be delivered anywhere else in the UK.


Construction college put on hold


"Our project met all the LSC’s вЂreadiness to start building’ criteria – with full planning permission, a strong design team, detailed build designs and all other funding sources in place for a planned start on site of Autumn 2009. We had already stripped away aspects of the project that were not essential. The remainder of funding – outside the LSC’s contribution – is already in place, including funds already set aside by the College and grant money from the East of England Development Agency.

"The National Construction College trains 30,000 adults and 800 apprentices every year, across the UK - the majority trained at NCC East. The College’s facilities are over 70 years old and in urgent need of redevelopment. Without this funding the college cannot continue to provide the training support the construction industry urgently needs. We are now actively seeking talks with the LSC to ensure they understand the unique nature of this project and to discuss how we can secure the redevelopment."

Panceltica warns of winding-up

Shareholders in construction newcomer Panceltica were told today that the company will be wound-up unless a last minute sale can be agreed.

Trading in the firm's shares was suspended earlier this month and shareholders are set to receive a letter outlining Panceltica's grim finances ahead of its AGM on July 9.

Panceltica's board is looking to sell its New Zealand based steel manufacturer Scottsdale Holdings and its Qatar trading subsidiary.

A statement released today said: "The board does not believe that there will be sufficient cash for a distribution to be made to its shareholders following any sale of the Scottsdale Group, the sale or disposal of the Company's Qatar trading subsidiary and the payment of creditors.


Panceltica warns of winding-up


"Furthermore the board notes that following such disposals the company would not be in a position to continue as an independent business and the board would seek to arrange a sale of the company and in the absence of which would proceed with winding up the company".

Just 13 of 144 delayed colleges to receive LSC funding

The Learning and Skills Council has identified 13 colleges from a total of 144 projects for a possible funding kickstart.

The 13 colleges that have been selected to proceed are:

Barnsley CollegeBournville CollegeFurness CollegeHartlepool College of Further EducationKirklees CollegeLeyton Sixth Form CollegeManchester College – WythenshaweNorth West Kent CollegeSt Helens CollegeSandwell CollegeSouth Thames CollegeTresham Institute of Further and Higher Education, CorbyWest Cheshire College

Each will be required to make “significant but manageable” cost cuts to get the go-ahead from the LSC.

Geoff Russell, chief executive of the LSC said: “These are the projects that will bring the greatest benefit to learners and communities across the country. They will have a substantial impact on the education and skills environment in their locality by transforming the condition of college buildings. While they show good value for money and excellent links with third party funding, we will ask each of these colleges to find additional cost savings in order that we can afford to fund additional projects.”

The rest of the projects will stay on hold and will not receive any further investment until 2011/12.

Thursday, June 25, 2009

Thomas Armstrong (Construction) suffers £950,000 loss

Thomas Armstrong (Construction) has dived into the red with a pre-tax loss of ВЈ950,000 on a turnover of ВЈ61m.

The figures cover the 12 months to 27 September 2008.

In the previous year there was a pre-tax profit of ВЈ2.3m on turnover running to ВЈ47m.

The group undertakes general building, civil engineering and industrial contracting.

The latest period was “very difficult” said the group.

In one division, Cumbria and North Lancashire, there was a full orderbook going into the new financial year and “this together with partnering and negotiated work enabled the area to report satisfactory results”.

By contrast, things were not well in the North Yorkshire operation where turnover fell “much lower” because Armstrong was unsuccessful in winning tenders for new work.


Thomas Armstrong (Construction) suffers £950,000 loss


As a result Armstrong bit the bullet, closed the area office and paid the cost of redundancies.

What with this redundancy spend plus the under-recovery of overheads as well as losses on poorly performing contracts, there was a total hit of ВЈ1.1m.

While all that was going on, Armstrong continued to develop its plumbing and heating department and this division secured contracts for central heating systems for local and regional housing associations.

During the year, Armstrong won a ВЈ41m contract for the retail and housing elements of the redevelopment of Penrith Town Centre.

Work commenced in June 2008 but then the developer unfortunately caved in and all work on the project ground to a halt in October.

That left applications for payment of ВЈ2.5m outstanding.

“Discussions have continued with the developer, Sainsbury and Eden District Council over the future of the project,” reports the group, adding that it has therefore provided for the sum of £2.5m in its latest annual results.

Calls for new tax scheme to fund £850m Northern Line extension

Mayor of London Boris Johnson, Transport for London and Wandsworth and Lambeth councils have written to the government to call for a new tax to help fund an extension of the northern line to Battersea Power Station.

The bodies want John Healy, minister for local government, to employ Tax Increment Financing (TIF) to fund the ВЈ850m project, according to Estates Gazette.

The letter says that the extension is crucial to the success of ambitious plans to regenerate more than 200 acres in the Battersea and Nine Elms opportunity area.

The tax model, which is common in the US, would involve councils selling bonds to forward fund infrastructure.

That money would then be repaid via an increase in business rates when the regeneration of an area was completed.


Calls for new tax scheme to fund £850m Northern Line extension


Pilot schemes are expected to be announced by the government in the Pre Budget report this autumn.

Mayor of London Boris Johnson is also understood to have agreed to divert money that he had proposed to raise for Crossrail via a levy on commercial development in the area towards funding the Northern Line extension.

ConnectPlus invites subbies to M25 suppliers' day

Connect Plus, the consortium in charge of the ВЈ6.2bn M25 PFI scheme, is to hold a supplier day on 3 July.

The event is expected to set out the roles of Connect Plus and its key suppliers in delivering the asset management strategy for the project.

The day is also set to provide details of the subcontract packages to be procured in 2009/10 including:

PavementsGeotechnicsTraffic ManagementCivils / DrainageConcrete Safety BarrierSpecialist Bridge RepairsDartford Tunnel (Civil Works)Specialist Bridge Repairs

Subbies interested in the event can register to attend by emailing:

The Connect Plus consortium of Atkins, Balfour Beatty, Egis Projects and Skanska maintain the motorway, and widen it to a fourth lane on some sections, over the next 30 years.

The deal reached financial close last month.

Wednesday, June 24, 2009

Barratt offers armed forces 2% discount

House builder Barratt has offered anyone in the Army, Navy or RAF a 2% discount off a new home to mark Saturday's first Armed Forces Day.

Barratt chief executive Mark Clare told the Sun: "We have one of the world's best armed forces. They have had a hell of a challenging period and all business should support those who have given so much."

The discount, which will launch on 27 June and run for the rest of the year, will be added to other incentives.

Clare said: "This should enable servicemen and women to own the roof over their heads. Prices have fallen by 25% in the past two years. We want to give them something on top."

Ministry of Justice invites contractors to NOMS rethink

The National Offender Management Service (NOMS) is to hold a market engagement day with contractors to determine whether its strategic alliance framework is the best way to procure future work.

The industry day, to be held on 15 July, will be open to construction firms already on the framework, as well as those interested in the Ministry of Justice's (MoJ) capital programme.

The MoJ said that the event was being held to help shape the future NOMS procurement strategy for capital and large maintenance projects in the prisons & probation estate.

However it will not address the development of new prisons through PFI or facilities management.

Work on NOMS prisons estates is currently delivered through 12 Strategic Alliances frameworks with contractors and frameworks with consultants.

F M Conway doubles pre-tax profit to more than £7m

F M Conway has enjoyed a surge in pre-tax profit to £7.1m which is more than double the previous year’s figure of £3.1m.

Conway’s latest financial results cover the 12 months to 31 March 2009.

The group’s description of itself is that it is “a multi-disciplined highway maintenance business offering a range of services including the recycling of construction and wet waste materials”.

Turnover of £110m was well up on the previous year’s figure of £90m.

The strong growth in profit was put down to early action taken to reduce costs and “operational benefits gained from the drainage treatment plant and the aggregate crushing facilities”.

The company is shortly to invest ВЈ4m in an asphalt plant.

Net cash inflow from operating activities ran to ВЈ8m (comparable figure in previous year: ВЈ7m)


F M Conway doubles pre-tax profit to more than £7m


The highest-earning director picked up ВЈ310,000 which was ahead of the ВЈ250,000 figure in 2007.

Conway has 640 employees and of this tally 450 are involved in labour. The group’s total bill for wages and salaries ran to £22m.

The company’s ultimate controlling party is M J Conway.

Tuesday, June 23, 2009

£11m university leisure centre deal up for grabs

An ВЈ11m contract to build a new leisure facility in Preston is up for grabs, after property consultant Drivers Jonas was appointed to manage the scheme.

The 6,000m2 development on the main campus of the University of Central Lancashire is set for completion towards the end of 2010.

Drivers Jonas will develop the design for the scheme, before shortlisting contractors, prior to tender at the end of this year.

The new facility will include a fitness suite, studios, sports hall and pre-school nursery – will open up future development opportunities for the University on the site of their existing leisure and nursery facilities.

Plans to build 750 homes by Thames Barrier get green light

A Barratt/Taylor Wimpey scheme to build 750 new homes on derelict land next to the Thames Barrier in London is a step closer after it was granted outline planning permission.

The London Borough of Newham have the green light to Barrier Park East, which will include commercial and retail space, new public open space and a play area – with over 370 affordable homes and over 130 three- and four-bedroom homes for families. 

The homes will be built to Level 4 of the Code for Sustainable Homes.

London Development Agency chief executive Peter Rogers said:

“Thames Gateway holds the key to London’s future success.  Barrier Park East is part of the drive to build new, environmentally-friendly homes that Londoners need.  We look forward to seeing a vibrant, sustainable community thrive on this former industrial site.”


Plans to build 750 homes by Thames Barrier get green light


Alastair Baird, Managing Director of Barratt London said:

“We are delighted to receive planning permission on Barrier Park East and look forward to creating an exciting new community.  Barrier Park East offers an excellent opportunity for us to provide new facilities for existing and future residents of the Royal Docks.  This is an extremely exciting project for us and we look forward to beginning work to deliver high quality new homes.”

Construction could start before the end of 2009 and is expected to take around five years to complete.

Morgan Ashurst wins £2.3m hospital extension job

Morgan Ashurst has won a ВЈ3.2m contract to build an extension at Velindre Hospital in Cardiff, which will include вЂbunkers’ to house new radiotherapy machines.

The contractor will build the вЂbunkers’, which will contain radiotherapy machinery, at the hospital’s specialist cancer care centre. 

The bunkers have been designed to provide radiation shielding for staff, patients and the public. 

The new extension will also feature all supporting examination, consulting and office spaces.

Work is set to complete in May 2010.

Monday, June 22, 2009

Top 5 construction tenders - 22 June 2009

This week's top five construction tenders include the ВЈ250m redevelopment of Rochdale town centre, highway maintenance on the Isle of Wight worth ВЈ46m and social housing refurbishment frameworks in Bridgewater and Glasgow. The details are only a summary of what is on offer, for the full OJEU click on the link.

Rochdale: City centre redevelopment

Value: ВЈ100m-ВЈ250m Rochdale Metropolitan Borough Council is inviting developers to submit proposals for the revitalisation of its town centre. The scheme must include retail, leisure, living, working and cultural elements and is expected to be completed within ten years. Deadline: 24 July

Newport: Highway maintenance

Value: ВЈ46m The Isle of Wight Council is advertising the island's highway term maintenance contract. Work will be located across the Isle of Wight's 500 miles of roads and will take place over three years, with the option of a three year extension. Deadline: 23 JulyADVERTISEMENT

Top 5 construction tenders - 22 June 2009


Glasgow: Housing refurbishment

Value: ВЈ31m-ВЈ40m The Glasgow Housing Association is looking for three contractors to make up a three year framework to upgrade multi-storey flats in various locations in the city. The works will comprise the overcladding of between 22 and 28 blocks over 10 storeys in height, together with the repair of existing, or the design and supply of new roofs. Deadline: 27 July

Bridgewater: Housing refurbishment

Value: ВЈ32m-ВЈ34m A five year framework is being advertised by Homes in Sedgemoor for the management of 4100 dwellings. The ALMO is looking for two contractors to work in separate geographical areas replacing roofing, windows and making other external repairs, as well as fitting kitchens, bathrooms and heating systems. The partnership is due to begin in April 2010 and will not include response or cyclical maintenance. Deadline: 17 July

Motherwell: Housebuilding

Value ВЈ15m-ВЈ25m North Lanarkshire Council is planning to run a framework of three contractors to construct between 150 and 250 new social housing units. The framework will initially be for two years with the option to extend for another two. Deadline: 13 July



Croudace Homes reports pre-tax loss of ВЈ28m

Croudace Homes Group made a loss of ВЈ28m last year on a turnover of ВЈ94m.

The figures cover the 12 months to 31 December 2008.

The performance was a reversal on 2007 when there was a pre-tax profit of ВЈ32m on turnover of ВЈ130m, representing a remarkable profit margin of close on 25%.

The net worth of the group finished the period at ВЈ77m, a fall of ВЈ26m.

The net cash outflow from operating activities ran to ВЈ9m, following an outflow of ВЈ1m in 2007.

The decrease in cash for the year was ВЈ21m, after a ВЈ22m decrease the previous year.

Things could have been worse with the house building group pointing out: “Our policy of not following the market into the provision of large numbers of apartments in urban areas but concentrating on all-new homes has protected the group from the worst effect of the market disturbance.”


Croudace Homes reports pre-tax loss of ВЈ28m


Last year’s hit was magnified by the effect of £23m-worth of land write-downs and exceptional costs.

Part of the latter was the £1.7m exceptional cost to cover redundancy payments – 20% of staff were laid off in August 2008.

Croudace Homes completed the sale of 350 dwellings, a drop of 10% from 390 sold in 2007.

The house builder closed its final salary scheme to new members in 1994 and the winding up process commenced during 2007.

The directors said: “Progress was made during the year and it is hoped that the winding up will be complete in 2009.”

There was a £7m charge in 2007 which was linked to the “curtailment of the defined benefit pension scheme”

Market pressures have not lessened the group’s ability to hand out dividends to its shareholders, however, and after passing over £1.3m in 2007 the dividend figure doubled to £2.6m last year.

'Zombie landbanks' stalk house building sector

A new monster is threatening the recovery of the house building sector: 'Zombie landbanks'.

The drying up of land sales and the collapse in rates of building have created a new monster that stalks the housebuilding sector: zombie landbanks.

A complex array of factors has led housebuilders and other landowners to sit on plots of land that they do not wish to sell and yet cannot afford to develop while house prices are at current depressed levels.

In spite of recent signs of life returning to the housing market, the dead weight of this volume of land raises questions about how quickly the sector can return to profit.

The secretive nature of land sales means that there are few reliable statistics for the level of activity in the market. But most observers agree conditions are unusually subdued.


Zombie landbanks stalk house building sector


“The market is not quite open yet. There is a lack of pressure on sellers to recognise that prices are falling,” says David Ritchie, chief executive of Bovis Homes.

Double whammy for housing - Jun-21Taylor Wimpey sees signs of recovery - Jun-19In depth: UK housebuilders - Jul-02Bellway sees effect of regional divergence - Jun-06Telford shares rise amid modest profit fall - May-28Redrow shifts focus to family homes - May-12Rob Perrins, finance director of Berkeley, which is due to report preliminary results on Friday, says: “We haven’t seen good value to date.”

Both companies have gone public with their plans to buy land aggressively in the downturn, and they are now being joined by start-ups such as Landbank, a vulture land buyer that plans to list on Aim next month.

The strategy was the making of Berkeley in the 1990s, when pressure from banks forced landowners to sell vast amounts of land at knockdown prices, which delivered handsome margins when they were finally built out.

But the planned spree has so far felt more like a phoney war. “Even if you have deep pockets, there’s just not a lot of land around,” says John Stewart, head of economic affairs at the Home Builders Federation.

“Unless you absolutely have to, you do not want to sell at the bottom of the market.”

Chris Temple, a construction partner at PwC, the professional services firm, says: “The land that there is on the marketplace is lower quality. The builders do not want to sell their crown jewels.”

Savills estimates that urban land prices have fallen by 50 per cent, while the more bullish buyers believe that discounts of 70-85 per cent on peak prices should be available. However, most landowners appear to be holding out for a rebound in prices.

“If no one is sitting on your back saying вЂyou must sell’, you hold off, just in case prices come back,” says Mr Ritchie.

Analysts and executives worry that we may be witnessing the creation of “zombie landbanks” – stockpiles of overvalued land that sit on balance sheets but that cannot be turned into profitable developments until house prices recover.

The size of landbanks has risen in recent years. Although the absolute number of plots held by the UK’s listed volume housebuilders shrank last year from about 306,000 to 267,000, the number of houses they are selling also shrank, from 65,000 to 50,000 homes. That means the overhang of undeveloped sites has risen from 56 to 64 months’ supply.

Housebuilders could build at last year’s rates until April 2014 without buying a single new plot of land; Bovis could hold out until May 2016.

Like the zombie banks blamed for stifling the recovery of Japan’s economy during the 1990s, many landbanks would be unsustainable were it not for the lenient treatment of their owners’ debts.

“The banks have got the housebuilders on life support,” says one property market analyst. “They don’t think that the housebuilders have marked down their land enough, but they may not be viable companies if they’re forced to sell it off at market rates.”

A refrain during Taylor Wimpey’s recent nine-month refinancing discussions was that its banks did not want to wind it up as they feared there would be slim pickings from its assets if they were sold into a slumping market.

The chain of leniency stretches to the banks themselves, which have parked many of their loans to landowners in the government’s asset protection scheme. Loans that would otherwise be called in are being supported because the government has promised to swallow all but the first 10 per cent of losses.

To get the market going again there needs to be either a fall in the value of land on housebuilders’ books or a rise in house prices, says John Messenger, an analyst at RBS.

“In the last recession most housebuilders kitchen-sinked their land values to start producing margins again,” he says.

But in spite of writedowns of 20-45 per cent by housebuilders, returning land to its true value may be harder this time.

Many housebuilders would like to write their land down more aggressively but international accounting standards now insist that they can only do so to the point where they are not making a gross loss on the sale. Administrative costs, interest payments and tax must then be subtracted, all but guaranteeing that there will be no earnings for shareholders until the overpriced land has worked its way through the system, says Mr Messenger.

“The industry is locked into making operating losses until they can find a way to make more savage writedowns or prices rebound.”

Shareholders may be in for a long wait. After the last recession, land prices did not return to 1989 levels for 10 years.

Sunday, June 21, 2009

Birse Civils wins £8.3m Rushenden Relief Road contract

Birse Civils has won an ВЈ8.3m contract to build the Rushenden Relief Road and a bridge over an existing Network Rail line on the Isle of Sheppey for Kent County Council.

The link road is a part of the Queenborough & Rushenden regeneration project, led by South East England Development Agency (SEEDA).  It will carry all commercial traffic from the new Sheppey Crossing and A249 to Neats Court.

The project involves;
two roundabouts
a short section of dual carriageway
800m of single carriageway road construction
Composite concrete and steel bridge deck
Large embankment constructed to combat settlement problems associated with the soft ground conditions.

Nick Young, Senior Project Manager at SEEDA said, “This new infrastructure is welcomed by local people, many of whom have campaigned for 30 years for a new road to direct heavy traffic away from residential areas.  It will create new jobs and open up employment opportunities in the area.”

Construction will start later this month and will take 20 months to complete including a 9 month settlement period.

Birse Civils is main contractor and Jacobs is Employers Agent and designer.

Inspace takes £5.3m care home contract

Inspace, the social housing arm of Willmott Dixon Group, has won a ВЈ5.3m project to build extra care housing for Richmond Housing Partnership.

The contract on Dean Road in Hampton, Middlesex involves building 41 units and a day centre on land previously occupied by houses and shops. The units will be available on a shared ownership basis as well as affordable rent, while the day centre will be run by Richmond Council.

Work on the project starts immediately and is scheduled for completion in July 2010.

RD Health wins £9m Scottish hospital redevelopment

RD Health, a consortium led by Robertson Construction and Dawn Construction, has won a deal to develop a ВЈ9m hospital through Frameworks Scotland.

Robertson Construction will work with the existing design team to develop a full business case for the replacement of Migdale Hospital at Bonar Bridge in Central Sutherland.

The new building will provide 22 beds in two units - one for older people with mental health needs and the other providing GP-led beds.

Work will start on site at the end of this year and that the hospital will be fully operational in 2011.

Bill Robertson, executive chairman, Robertson, said: "We are delighted to be part of Frameworks Scotland and this project with NHS Highland signifies RD Health's third major award through the initiative.

"We very much look forward to working closely with our project partners and our client NHS Highland to develop this centre which will modernise the provision of healthcare services for the local area."

Thursday, June 18, 2009

Winners unveiled at CJ Best Places to Work in Construction Awards 2009

The winners of the Contract Journal Best Places to Work in Construction Awards 2009 were unveiled during a packed ceremony yesterday at Lord's Cricket Ground.

View our Best Places to Work 2009 gallery

The full list of winners is as follows:

Professional Services (up to 50 staff): JLES GroupProfessional Services (over 50 staff): Tony Gee & PartnersSupplier (up to 50 staff): Arc-Gen HiltaSupplier (over 50 staff): Sig Specialist Construction ProductsCivil Engineering Contractor (up to 500 staff): Hewlett Civil EngineeringCivil Engineering Contractor (over 500 staff): Morgan EstBuilding Contractor (up to 100 staff): Mount AnvilBuilding Contractor (101-500 staff): John Sisk and SonBuilding Contractor (over 501 staff): Interserve Project ServicesSpecialist Contractor(up to 50 staff): Weatherwise Specialist Projects Specialist Contractor (over 50 staff): Progressive Systems

Company showing most year-on-year improvement:

Winner: Linford GroupHighly Commended: JLES Group

Aukett Fitzroy Robinson slips into the red at the half-year

Aukett Fitzroy Robinson, the architects quoted on the Stock Exchange, reports a woeful six-month trading period which has resulted in a pre-tax loss of ВЈ1.2m.

Staff levels in the UK were cut by 36% to produce an annualised saving of ВЈ2.9m but there is the prospect of more to come.

Nicholas Thompson, chief executive, said: “In the face of the steady downward trend in our markets we have progressively taken steps to reduce our operating costs.

“Given the size of our secured, but uninstructed order book, we remain confident that we will be able to trade through this downturn.”

Addressing future prospects, Thompson added: “We see no firm evidence of any upturn and therefore in the short term management attention will focus on the continuing need to lower our cost base.”


Aukett Fitzroy Robinson slips into the red at the half-year


Thompson believes the group will survive, saying that “in the longer term, when markets recover, we will revert to our corporate objective to increase revenues to £25m.”

Accountants Baker Tilly stepped forward with an independent review report which says little other than saying “the directors are responsible for preparing and presenting the half-yearly financial report”.

The interim dividend has been scrapped though the board says there could be a payout to shareholders at the full year-end if the sun has started to shine.

The latest figures cover the six months to 31 March 2009. Turnover was lower at ВЈ8.2m (figure in comparable period last year: ВЈ11m). The first half of the previous financial year generated a pre-tax profit of ВЈ1.2m.

Twelve planning applications with a construction value of ВЈ1.5bn were in progress during the period and of these ten have so far received consent.

However, to date only two of these schemes, with a construction value of ВЈ40m, have proceeded to the next stage.

This dragging of feet reflects “the cautiousness in the client market due to tenant scarcity and also the general lack of funding due to the terms imposed by lenders for equity participation from developers”.

During the period Aukett UK moved its main office which triggered one-off costs of ВЈ475,000.

There has been a hiccup in the Middle East: a re-appraisal of on-going projects resulted in some fees being renegotiated and others being delayed while such negotiations took place.

This reduced turnover by ВЈ585,000.

Additionally, the UK operation retained a number of staff in excess of the optimum in respect of a project that was won in February but later had the award withdrawn. Up to 40 staff would have been allocated to the project had it proceeded.

This resulted in additional staff costs in the period of ВЈ120,000.

Internationally Russia's performance was mixed with a number of major projects being cancelled or delayed due to funding difficulties in the early part of the financial year.

This was offset by the success in winning a new mixed use scheme on the Moscow River in January.

Revenue remained largely unchanged at ВЈ1.9m (2008: ВЈ1.9m) with profits of ВЈ600,000.

 However there remains a residual level of uncertainty on all projects in the current economic environment.

Finally, the group has three major claims for fees under existing contracts with clients. Two of these claims relate to additional work performed whilst the third relates to the fee due where recovery litigation is at an advanced stage

The group notes: “The directors have made estimates that they consider reasonable and prudent of the most probable outcome of these three claims based upon available information including historical precedents and professional advice.

“However, a different outcome from any of these claims from that anticipated could increase or decrease the group's year end results. Any associated costs have been written-off as incurred.

Morrison Construction wins ВЈ4m office job

Morrison Construction has won a ВЈ4m contract to build an office building and separate warehouse in the Midlothian town of Newbridge for Scotland Gas Networks (SGN).

The contract will also include the construction of a storage yard, car parking for up to 50 vehicles and landscaping.

Work will get underway imminently with the whole project due to complete early next year.

Gordon Milne, Operations Director for Morrison Construction, said: “Our construction team is delighted to have secured this contract. We have invested a great deal of time into understanding the service SGN requires from its new Newbridge base and have come up with something that suits them perfectly.

“Consultation was a particular feature of the design phase and will continue through construction to completion."

Wednesday, June 17, 2009

Bellway gets go-ahead for £3.5bn Barking Riverside first phase

Housebuilder Bellway has recieved the green light for the first 3,300 homes on the ВЈ3.5bn Barking Riverside housing development.

The scheme also comprises two new schools, a community centre and enhancements to public space.

Plans were submitted to the Thames Gateway Development Corporation in January, and work is to start by the end of the year.

Around 10,800 homes are planned for the 150ha site.

More planning news from EGI.



John Sisk and Corus team up for modular construction venture

John Sisk & Son has teamed up with the modular manufacturing arm of Corus to create a new modular construction venture.

Sisk+Corus Modular Construction will target the hotel and student accommodation markets, the firms announced today..

Richard Jones general manager of Corus Living Solutions said: “Despite the current economic climate, many key players in the hotel sector are investing in continued growth and expansion.  Optimising modular construction for the lowest project cost, earlier completion, improved quality and building performance, the Sisk+Corus offering will create significant benefits that will be realised by everyone ranging from investors, development directors, hotel operators and, ultimately, the end-consumer.”


John Sisk and Corus team up for modular construction venture


Sisk pre-construction director Robin Herron added: "Our combined expertise means we can bring added value to our clients. Design and cost appraisals at pre-planning stage, plus a complete вЂin house’ design and build service will maximise efficiency and ensure successful and timely delivery to guaranteed standards."

£46m Isle of Wight highways maintenance deal up for grabs

The Isle of Wight Council has advertised a three-year highways maintenance contract, worth ВЈ46m, with a possible extension of up to three years.

The contract covers the Isle of Wight Highway and Rights of Way networks, each approximately 500 miles long, and starts in autumn 2009.

Expression of interest should be registered by 23 June.

Further details on the official OJEU notice.

Nobles Construction salvages £3.9m Felton Construction contract

Liverpool-based Nobles Construction has taken over a ВЈ3.9m contract to build a medical centre in Birkenhead from in-administration Felton Construction.

The Laird Street Medical Centre due to open in October 2009 but is now expected to be complete in early 2010.

Commenting on the news, Assura development manager Tom Cooke, said: "Whilst it was disappointing to learn of Felton Construction’s demise, we are delighted that our development partner, LSP has now completed a thorough due diligence process leading to the appointment of Nobles Construction enabling work to re-commence as soon as possible.”

Once completed the new facility will accommodate eight GPs from the nearby Miriam and Cavendish Medical Centres.


Nobles Construction salvages £3.9m Felton Construction contract


Peter Linford, director at Nobles Construction, said: “All parties have been able to act very quickly to salvage the scheme and ensure there is minimum delay to operations.

“This is a perfect scheme for us. We have a proven track record of delivering projects of this kind against client objectives, on time and within budget.

“We’re confident we will help deliver a state-of-the-art facility that will improve the access of health care to the local community.”

HCA announces pioneering long-term investment plan with Norwich

The Homes and Communities Agency (HCA) has announced plans for a long-term partnership deal with Norwich City Council, which will see it invest ВЈ7.5m in the city while the Council invests in 1,300 homes whichwill be jointly developed.

Speaking today at the CIH Conference in Harrogate, Terry Fuller, HCA Regional Director for the East of England, outlined details of the partnering agreement, which is set to last 12 years.

The surplus to come out of the sites could reach between ВЈ60-80m over the next 12 years, which will be reinvested into more regeneration schemes in the city.

The aims of the agreement are:

To accelerate the delivery of affordable homesTo increase the supply of private homesTo improve the quality of existing homesTo maximise the opportunities for local employmentTo deliver early outputsTo create sustainable communitiesTo deliver strategic regeneration projects within Norwich, such as eco-retrofit programmes or estate renewalADVERTISEMENT

HCA announces pioneering long-term investment plan with Norwich


Fuller said: “We have been in dialogue with Norwich City Council for the past four months, as part of our Single Conversation, and I now believe we have an outstanding deal on the table. I want to thank the hard work and commitment of the Norwich and HCA staff in bringing this together so quickly. This is about reimagining the way we deliver -  creating local homes, local jobs and sustainable communities for the future, and demonstrates what the HCA and local authorities can do in partnership together.” 

Chief Executive of the HCA, Sir Bob Kerslake, commented: “The deal announced today with Norwich shows that despite the current economic climate we’re making significant progress towards the Single Conversation way of doing business; something which we’re working to see replicated in other regions of the country in the coming months. As a place-based approach, it will take the vision and ambitions of local authorities and help them achieve their plans for regeneration and growth through a shared investment agreement.  Through this process, the HCA will act as the bridge between local ambition and national targets.” 

Monday, June 15, 2009

Bouygues (UK) sparkles with 8.8% profit margin

Bouygues (UK) achieved an 8.8% profit margin on its ВЈ120m turnover last year.

The group’s core business is the construction of buildings, mainly hospitals and schools, within the PFI and BSF procurement frameworks.

With few UK construction groups able to produce a profit margin of 3% or more, Bouygues achievement is quite remarkable although nothing new: the latest figure follows a margin of 10.4% in the previous year.

Bouygues latest results cover the 12 months to 31 December 2008.

Pre-tax profit ran to ВЈ10.3m (comparable figure in 2007: ВЈ11m).

The cash flow statement shows a net cash inflow from operating activities of ВЈ48m (figure in previous year: ВЈ50m).

The net funds jumped during the year from a starting tally of ВЈ97m to close at ВЈ140m.

Staff numbers rose to 370, up from 260 in 2007.

The group’s parent company is Bouygues, the French conglomerate. It received dividends to a total value of £11m during the period from this UK business.

Sunday, June 14, 2009

Vinci wins £10.3m Worthing hospice deal

Vinci Construction has been awarded a ВЈ10.3m contract by St Barnabas House hospice in Worthing, West Sussex.

The 56-week project comprises the construction of a two-storey hospice with five radiating single-storey вЂpods’ for patient accommodation. 

The copper-clad building will also include a day hospice, chapel and glassed reception area with a sedum roof, together with associated outbuildings and external works. 

London mayor gives ok to Dome extension

London mayor Boris Johnson has given the go ahead to the proposed extension the O2, the former Millennium Dome, in North Greenwich.

The extension will increase the venue's size by 24,000m2, providing additional retail, leisure, and entertainment space. 

The application will now be considered by Greenwich council.

The plans would bring the total size of the O2, operated by Anschutz Entertainment Group Europe, to 86,000m2.

More planning news from EGI.


Contractor boss goes undercover as labourer on his own sites

The chief executive of a civils contractor has pledged to change the way the firm communicates after two weeks undercover as a labourer.

Stephen Martin, chief executive of Clugston Construction, worked among his 600 strong workforce to find out what life is like at the coal face of his firm.

“I’ve been chief executive for two years and thought it would be a good way of getting under the skin of the company, work with all our great people and find out what life is life at the coal face,” he explained.

Martin spent two weeks being followed by a television crew while he worked on a variety of Clugston sites. To immerse himself in the role he gave up his comfortable executive lifestyle, grew a beard and dossed in a ВЈ27 a night B&B in Scunthorpe. ADVERTISEMENT

Contractor boss goes undercover as labourer on his own sites

Each morning Martin was picked up and taken to a site where he would muck in with the other labourers.

Explaining his reason for the stealth, Martin said: “I’ve been around every site we have, but when you’re in a suit and a tie you’re invisible to the workforce.”

By shedding his suit Martin learnt that all the carefully sculpted communication the company sent round was being ignored.

"I’ve resolved to abandon our glossy bulletins as I realised no-one read them,” he said. “Particularly in a recession we need to stop the rumour and have honest interaction. People need reassurance and information. I’ve now changed the style, time and way we communicate.”

He has also launched an initiative called вЂBridge the Gap’, having identified that “we have an ageing workforce and are at risk of losing lots of skills, expertise and knowledge”.

The scheme aims to identify those with the ability to coach, develop those education skills and ensure the knowledge is passed on. “There needs to be a collective approach to apprentices so that the skills of the older generation and enthusiasm of apprentices are not lost to the industry,” Martin added.

And in terms of his own development, Martin is now more sympathetic of the tough grind life on site can be. “I realised just how hard people work. I was definitely pulling my weight, though most of the people I worked with would have said I was holding them back. It was really physically tiring.”

“I’m glad I did it and I’d encourage any other boss to do it. I don’t know how else you can get the truth from your workforce.”

Undercover Boss will be aired on Channel 4 on 25 June

Thursday, June 11, 2009

Kone wins lift contract on Dubai twisted tower

Kone has won an order to supply eight customized high-rise lifts for the new Infinity Tower in Dubai.

Kone wins lift contract on Dubai twisted tower

Three of the lifts will travel at a speed of 8 m/s across a maximum travel of 271 metres. The installation of the equipment will start in 2010 and is estimated to be completed in 2011.

With 330 metres and 75 floors, the Infinity Tower will be the highest twisting building in the world. It will be located in the Dubai Marina and will provide unobstructed views over the surrounding  Palm Jumeirah and the Arabian Gulf.

Due to the challenging profile of the building, the lift shafts take an unconventional circular shape, which required Kone to use its expertise in designing customized solutions to serve the people flow needs of the tower.

In addition, Kone's pioneering EcoDisc hoisting machine helped to solve the requirements of the high vertical travel combined with limited space for machine rooms.

ISG win at Leeds University

ISG has secured the third and final phase of a ВЈ4.1m refurbishment contract for the University of Leeds on the Michael Sadler Building.

Work will start later this month and is scheduled for completion ahead of the new academic year in September.

The comprehensive refurbishment of the teaching block has taken place over three distinct phases to enable the building to remain in occupation as ISG systematically strips out and modernises facilities across the entire building.

This final phase sees the contractor fully refurbish floors three, four and five, with a partial refurbishment across the basement and lower ground floor levels. The fast track project involves significant access and noise restrictions, with the implementation of a 20 hour shift pattern as elements of the building are only accessible out of hours.

Pihl UK turnover hits ВЈ60m in first full year

Pihl UK, the Danish-owned contractor working with Galliford Try on the new Museum of Liverpool, has recorded a ВЈ60m turnover in its first full-year of trading.

The firm, which announced this week that it is to open its new headquarters in Aberdeen, made a pre-tax profit of ВЈ3.8m for the year ended 31 December 2008.

Pihl's profit arose from two major long-term contracts - the 3Rs Schools schools project in Aberdeen worth ВЈ120m, and the ВЈ21m Liverpool Museum.

The 3Rs projects is currently undergoing a debt refinancing, following the collapse of the Icelandic banks which were backing the scheme. But Phil's directors said that an failure or delay in the process "will not detrimentally affect Pihl UK Ltd's ability to meet its liabilities."


Pihl UK turnover hits ВЈ60m in first full year


The Liverpool Museum is set for completion in summer 2009.

Aird Buist, Pihl UK regional manager, said: "From our inception in 2007, we have gorwn from three to over 90 members of staff.

"We are investing significantly in the remodelling of our new new building [in Aberdeen]. The location represents the growth we are experiencing as a company, which is resisting the recession trend with an increase in turnover from ВЈ13m in 2007 to over ВЈ60.1m in 2008."

Monday, June 8, 2009

Construction SMEs owed £2.5bn on any given day

Small and medium-sized construction firms are owed ВЈ2.5bn on any given day because suppliers and customers are failing to pay on time.

That’s the finding from the Barclays Local Business annual Late Payments report.

The report showed that the on a typical day, construction firms in England and Wales are ВЈ2,837 out of pocket as a result of suppliers or customers failing to pay within 30 days.

The total figure has resulted in these SMEs losing nearly £1.1 billion over the last twelve months due to non-payments – an average of £1,292 per business.

John Davis, marketing director for Barclays Local Business said: "Despite some recent positive economic signs, it’s concerning that late payments are on the rise. This is a serious issue for the construction firms we talked to - four in ten say it threatens their day-to-day survival."


Construction SMEs owed £2.5bn on any given day


The survey also found that firms typically have to wait 13.3 days after the invoice due date before they get paid. On average they spend 1.4 hours a day chasing late payment.

And Barclays found that the problem showed few signs of easing - 65% of companies polled in the survey said they thought the problem was likely to get worse over the next 12 months.

Bids invited for Olympic landscaping

The Olympic Delivery Authority has issued a contract notice for landscaping works within the south of the 2012 Park.

The works involve the construction and maintenance of the landscape and public realm works contained within the south Park section of the Olympic Park (divided from the north Park by the North London Line that runs through the centre of the Park).

The works will include:

- the front- and back-of-house areas associated with the south Park venues;
- the concourse connecting venues together;
- spectator support areas, and soft and hard landscape works required within the south Park boundary;
- the demolition, construction and maintenance of the subsequent legacy transformation works.


Bids invited for Olympic landscaping


Interested bidders may only express interest via the eTendering website. Expressions sent by any other means will not be accepted.

Those expressing an interest must complete a pre-qualification questionnaire and the deadline for expressions of interest is Monday 13 July.


Lend Lease told to cut Olympic staff

Lend Lease is to slash staff numbers working on the ВЈ1.1bn Olympic athletes village by up to 30% following requests from the Olympic Delivery Authority (ODA).

The athletes village is being paid for completely with public cash after the Government turned down an offer from the developer to invest ВЈ150m into the scheme.

But Lend Lease is still development manager on the job and its Bovis Lend Lease arm is acting as construction manager.

The Village is now being tendered as separate accommodation blocks with Ardmore, Galliford Try and Wates shortlisted for the first plot.

One source close to the project said: "The ODA has told Lend Lease it will have to cut numbers among its team members.

"They were geared up staff-wise to manage and run the whole job but it has changed completely since then.


Lend Lease told to cut Olympic staff


"The blocks are all going to go out to Tier 1 contractors so you don't need vast numbers of Lend Lease people on the job overseeing work."

Lend Lease chief executive officer Steve McCann said: "The project is ahead of schedule and we can now focus on delivery under an attractive fee deal without equity risk."

An ODA spokesman said: "The workforce delivering the Olympic Village will continue to increase as the project progresses.

"All resources on the Village will continually be reviewed to ensure the maximum efficiency."

Sunday, June 7, 2009

Construction output records worst ever fall

Total construction output in the first quarter of 2009 was down by 16.5% compared to the corresponding quarter a year ago, the worst fall on record.

The latest government figures from the Office of National Statistics show output down 9% compared with the final quarter of 2008, as workloads in the sector shrink even further. Between the third and fourth quarters of 2008 output fell by 4.9%.

Are the statistics correct? Analysis on our Brickonomics blog.

Below: Construction output per quarter since 2002.

Construction output records worst ever fall

The total volume of construction output in the 12 months to Q1 2009 fell by 6% compared with the previous 12-month period.

However there was one bright spot with infrastructure orders up for the quarter and for the full year.


Construction output records worst ever fall


The sector breakdown was as follows:

Private housing. Down 10% on the previous quarter, and 25% down for the year to Q1 2009 compared to the previous 12-month period. Public housing. Output 8% lower compared to the previous quarter, and also 8% down for the year compared with the previous 12 months. Infrastructure. Output in the 12 months to the Q1 2009 was 7% higher compared with the previous 12 months and Q1 2009 was 2% up on Q4 2008. Private industrial. Down 27% for the 12 months to Q1 2009 compared to the previous 12 months, and 21% lower for the quarter compared to Q4 2008.
Private commercial. Fell 8% compared with the previous 12 months and dropped 16% in Q1 2009 compared with the previous quarter. New public non-housing. Increased by 15% compared with the previous 12 months but fell by 3% in Q1 of 2009
compared with the final quarter of 2008. Public housing repair and maintenance. Up by 3% for the 12 months to Q1 2009 compared with the previous year, but down 1% for the quarter compared to Q4 2008.

Vattenfall pulls out of UK new nuclear market


Swedish firm Vattenfall is pulling out of the race to build new nuclear plants in the UK for 12-18 months due to the “economic recession and market conditions."

Speaking at the Reuters Energy Summitt Vattenfall’s chief executive Lars Josefsson said the recession and falling energy prices had raised question marks over investing in Britain’s plans to let private companies build new plants. However the company said that it “retains a significant interest in the UK energy market, and will continue to monitor developments in UK new build."

However industry players questioned Vattenfall's motives this week.

Dougie Rooney, Unite's national energy officer, said: "Vattenfall lost a march in the UK new nuclear programme when they pulled out of bidding for British Energy at the 11th hour. That makes it difficult for Vattenfall to look like a serious player now. It has left other potential partners confused about their strategy and so it is hard for them to make the joint venture they need to be a player."


Vattenfall pulls out of UK new nuclear market


A leading UK contractor said: "They  always planned to be in the second wave of the programme so standing back for 18 months could be tactical."  

Vattenfall's announcement closely follows French utility giant EDF's warning last month, in an interview with the Financial Times, that Britain's new nuclear plants may not get built without financial backing from the UK Government.


Housing developer pumps raw sewage into river

Housing developer Cofton Group has caused a stink in Norfolk after accidentally pumping raw sewage into a river.

Bad smells were reported last month around the Queen's Hill development in Costessey, where Cofton is lead developer on a 2,000-home site, 500 of which have been completed and occupied so far.

The Environment Agency (EA) investigated and discovered a fault at a sewage pumping station linked to the development, which is the responsibility of Cofton, along with the sewer network.

An EA spokeswoman told the Eastern Daily Press: “The incidents happened on May 22 and a week before that. We received calls from residents and went to investigate it. The problem was with the pump station and that has now been corrected, so no more sewage will be discharged.


Housing developer pumps raw sewage into river


“The incidents resulted in a very low environmental impact.”

Cofton, a civil engineering and development group specialising in providing serviced land to house builders, went into administration in March.

The administrator for the group, Deloitte, said the sewage pumping station was owned by Cofton, but responsibility would soon transfer to the house builders involved in the project, Barratt, Bloor, Bovis and Taylor Wimpey.

Anglian Water will take over management and maintenance of the pumping station and sewer network once the development is complete.

Friday, June 5, 2009

Dawn set to deliver £100m Ayrshire community hospital

Local firm Dawn Construction has made the cut for a ВЈ100m community hospital deal in Ayrshire.

Under the NHS Frameworks Scotland scheme, the firm has been earmarked as principal supply chain partner to deliver the new North Ayrshire healthcare facility in Irvine.

Design work on the scheme has just started and construction work on the project is expected to begin next year.

Dawn is part of the RD Health consortium, which includes Stirling-based Robertson Construction.

The project includes a new community hospital and a new mental health facility.

The community hospital is likely to include an outpatients'department, care of elderly people facility and a rehabilitation centre.

Discussions are also underway with client NHS Ayrshire & Arran and with North Ayrshire Council about the possibility of including a leisure centre as part of the development.


Dawn set to deliver £100m Ayrshire community hospital


Alan Caldwell, RD Health's framework manager, said: "Partnerships developed by the NHS Framework scheme can offer key benefits when delivering capital projects.

"These benefits can include both earlier and faster delivery times, value for money and established expertise in the design, construction and maintenance of NHS developments throughout the Scottish healthcare system."

Helical Bar has £500m war chest for new developments

Property giants will have a pivotal role to play if a funding gap is to be avoided next year.

And Helical Bar offered some hope last week after announcing it has raised ВЈ500m to invest in new speculative developments.

Chief executive Michael Slade believes the property market has turned a corner and is targeting retail, student accommodation and retirement living schemes to lead the sector out of recession.

He said: “At a time of such economic uncertainty it is always easy to see the downside risks but lose sight of the opportunities provided when assets are priced at cyclical lows. All the ingredients are coming into place for sustained recovery, similar to that which followed the difficulties of the 1970s and early 1990s, and we have positioned our business to benefit from this.


Helical Bar has £500m war chest for new developments


“Well let properties may be the most defensive but there is more upside on risk assets and this is where Helical is now concentrating its efforts. Looking forward, Helical is confident that we will see great value emerge.

“We are particularly enthusiastic about food store developments, retirement village projects, student accommodation developments and our Government office campus schemes.”

Liverpool FC stadium construction on hold until 2012

Liverpool Football Club's mounting debts mean that it has put construction of its new stadium on hold.

Laing O'Rourke has been lined up to build a new ВЈ400m home for the club at Stanley Park, but work is now not due to start until 2012.

The news comes as it was revealed that the parent company of Liverpool FC, owned by Tom Hicks and George Gillett had made a ВЈ42.6m loss for the year.

Kop Football (Holdings) saw its debts climb to ВЈ86m, from nearly ВЈ44m in the previous year.

A statement in the accounts said the owners were "committed to building a new stadium and actively seeking funding to complete the project".

But they admitted that "the opening of the new stadium will be delayed until 2012".

The club's auditors KPMG warned that the need to refinance loans by 24 July cast "significant doubt" on the future of the group as a going concern.

Thursday, June 4, 2009

QED Wates reaches financial close on £280m Luton BSF

QED Wates has reached financial close on a ВЈ280m deal to deliver Luton's Building Schools for the Future (BSF) programme.

The project has gone from the start of procurement to close in 18 months - two months earlier than planned.

QED Wates, which is led by Wates Group, will rebuild or refurbish 13 of Luton's secondary schools over the next four years.

Paul Drechsler, Chairman and Chief Executive of Wates Group, said: “The partnership between Luton Borough Council and QED Wates will transform the education available to young people in Luton, as well as provide many opportunities for employment and training.            

“Wates is delighted to be part of such a major milestone for Luton and I congratulate and recognise all the teams at Luton Borough Council, Partnership for Schools and QED Wates for their professional and thorough engagement - demonstrating a real partnership approach that has achieved one of the fastest financial closes in the BSF programme. I look forward to celebrating many more future successes together.”

Boris Johnson approves £1bn Kidbrooke estate regeneration

London Mayor Boris Johnson has given the go-ahead for Berkeley Homes and Southern Housing’s 4,000-home regeneration of the notorious Ferrier estate in Kidrooke, south-east London.

The existing housing on the estate will be demolished and replaced with new-build residential, 38% of which will be affordable, plus 37,000m2 of commercial and shopping space, community facilities, a new primary school, and recreational space.

The ВЈ1bn scheme was approved by Greenwich council in April, and demolition work has already started.

The council began decanting people from Ferrier in 2006. Previously it was home to 5,000 people.

The estate also formed the backdrop for Gary Oldman’s film Nil by Mouth.



Safety cultures reap rewards

The construction industry has been well represented in a recent round of safety awards with Speedy Hire, Finning/Hewden and Wolseley all picking up honours.

Speedy Hire won an International Safety Award from the British Safety Council while Hewden and Finning picked up a Gold Award from the Royal Society for the Prevention of Accidents and Wolseley took the Fleet Safety Award for Large Fleets’ at the 2009 Fleet World Honours.

Mark Turnbull, Speedy’s safety, health, environment and quality director said: “Health and Safety in the construction industry has been a top priority for a number of years and we will continue to provide the equipment, training and advice to help our customers meet a wide range of health and safety standards.”


Safety cultures reap rewards


Jim Gray, head of EHS&Q at Finning and Hewden said: “The Gold Award represents a consistent standard of health and safety both onsite and within the work place.”

Paul Gallemore, Wolseley’s European head of health, safety, environment and quality said road crashes were the most likely cause of business-related fatalities.” The company developed a multi-faceted approach to safe driving that resulted in a 50% drop in accident rates in four years.

Wednesday, June 3, 2009

Network Rail profit slides, debt increases

Rail infrastructure operator Network Rail has seen its annual profit fall and its debt level increase during the last financial year.

Pre-tax profit dropped to ВЈ1.52bn for the 12 months to 31 March, from ВЈ1.59bn a year before, while net debt climbed to ВЈ22.3bn from ВЈ19.7bn.

NR invested ВЈ4.7bn in the network, up from ВЈ4bn in the year before, and completed the ВЈ9bn upgrade of the West Coast Main Line.

However, the operator failed to meet targets for efficiency savings set by the Office of Rail Regulation.

Recently, chief executive Iain Coucher announced he was giving up his annual bonus this year, although he will still receive his long-term performance bonus.

Last year he was awarded a bonus of more than ВЈ305,000 and a further ВЈ205,000, despite the company being fined a record ВЈ14m by the ORR for three engineering work overruns during the 2007-08 period.


Network Rail profit slides, debt increases


It will not be clear whether other directors will give up their bonuses until the publication of Network Rail's annual report at the end of the month.

Better news came with punctuality hitting a new high, with 90.6% of trains arriving on time, the best performance since records began in 1992.

Trains are considered to have arrived on time if they are within five minutes of their scheduled time on commuter routes and within 10 minutes on longer routes.

Haulotte buys Access Rentals out of administration

Haulotte has bought Telford-based platform hirer Access Rentals out of administration.

The French access giant paid an undisclosed fee to administrators KPMG for the assets and staff of the business, who will transfer across to Haulotte under TUPE. There will be no redundancies among its 70 staff.

However, Access Rentals' 1400-strong fleet remains owned by a finance company. The fleet includes articulated booms, telescopic booms, scissor lifts, vertical masts, and some specialist access equipment.

"We've bought Access Rentals as an ongoing business, which we'll run as a separate entity," said Philip James, Haulotte UK's general manager. "It has a strong customer base and it's been trading as normal today."

Access Rentals had revenues of "approximately ВЈ10m" in its last financial year, said James. It currently has nine branches around the UK.

Funding hope for small contractors

A leading venture capitalist has been drafted-in to head a government review on the availability of growth funding for small and medium sized businesses.

Former 3i partner Christopher Rowlands will help to decide if the government needs to intervene to help firms secure growth capital.

The review follows fears that businesses seeking between ВЈ250k and ВЈ2m have had problems attracting equity finance.

The Growth Capital Review is the first measure to be taken forward from the government's 'New Industry, New Jobs' strategic plan for economic recovery.

Business Secretary Lord Mandelson said: "We have taken action to help businesses access short term finance to survive the global downturn, and to build our economic future.


Funding hope for small contractors


"This review will identify if there is a role for Government in facilitating public and private investment to address gaps in the market.

"Our priority will be to ensure that high-growth businesses, which will be very important for the economy, are able to secure the capital they need."

BAM Construct fined £15,000 after fitter run over by telehandler

BAM Construct has been fined ВЈ15,000 after a worker on the ВЈ22.5m Willow Place shopping centre in Corby was reversed over by a telehandler.

A male fitter working for Pyrotect, which had been subcontracted by BAM to install a fire protection system on site, was carrying a piece of plasterboard and walking in the opposite direction of the telehandler on 23 August 2007 when he was reversed over by the vehicle.

The driver stopped, thinking he had run over a piece of fallen plasterboard which was obstructing his path, only to find the subcontractor under the wheels of the machine.

The fitter suffered a broken tibia and fibia in his left leg, wounds to his left foot, a broken left ankle and a dislocated bone in his right leg. He has not returned to work, two years after the accident.


BAM Construct fined £15,000 after fitter run over by telehandler


BAM pleaded guilty to a charge under the Health and Safety at Work Act 1974 for failing to plan, organise, control, monitor, and review traffic on site.

The firm was fined at Corby Magistrates' Court and ordered to pay ВЈ13,540.90 costs.

Health and Safety Executive (HSE) inspector Mhairi Lockwood said: "This was a very serious and preventable incident which has resulted in a man being away from work for nearly two years.

"This company obviously has policies in place but it is vital that they are properly considered, implemented and monitored at site level and throughout the life of the project.

"BAM are one of the big players in the construction field and we would expect better, especially as they have been advised previously on workplace transport at this site."

7 ways to save a failing construction business

With contractors' finances being severely tested by the recession, Andrew Stoneman describes how to salvage parts of a business when it all goes wrong.

Contracting businesses are experiencing acute financial challenges as projects are delayed and developer clients struggle to realise the sales anticipated in development cashflows. This means contractors struggle to hold together teams given the long lead times involved in competing for new work and proceeding with it.

Add to this the difficulty and unpredictability of access to backstop support from the banks, and keeping in the black is a tricky proposition. But there are a number of sound principles that will help a business navigate a passage through the downturn.

1. Monitor cashflow closely - be realistic and act promptlyADVERTISEMENT

7 ways to save a failing construction business


As ever, the imperative is to identify problems brewing as early as possible. Plan responses and ensure that relevant professional support and advice is sought as required.

Businesses should be re-forecasting cashflow at least monthly and contrasting to actuals frequently. Sensitivities require to be applied based on risk assessments for major planned receipts and payments.

If required, bring in professionals in cashflow management, who can help with discussions with clients, subcontractors, suppliers and indeed your funders, and more broadly on delivering operational and financial non-insolvency turnaround support in times of challenge.

2. Collect the debts

A fundamental aspect of cash management is, of course, collection of sums due. Businesses face enormous challenges in ensuring that invoices are paid and that processes are in place to secure payment should the client default. So make sure your internal systems are adequate to ensure that if the client defaults there is sufficient evidence at hand to support your claim.

3. Tax arrears solutions

When the contract cashflow slows down, perhaps one of the first areas where the pressure will pop out is in terms of liabilities to HM Revenue & Customs. The implications of ignoring the issue of arrears, or worse be thought to be looking to take advantage of the Crown creditor, are serious and potentially life threatening to any business.

This is a very delicate area for any business and issues do require to be addressed promptly and professionally. Immediate action must be taken to prevent a difficult situation deteriorating into one where the directors risk losing control. The aim must be to negotiate a realistic and achievable time-to-pay arrangement, hence creating the breathing space to form a plan to address the more fundamental issues facing the business.

4. Strategic options and restructuring

If action is taken early enough, a businesses can avoid risking unplanned insolvency. Contracting is a highly fragmented sector and during this economic downturn many will find that they no longer have the contract base to successfully support their overhead. It may be necessary to identify potentially complementary businesses which together would be in a position to drive out synergies of sufficient scale to ride out the downturn.

5. 'Pre-packaged' administration

If radical surgery is required, it will be necessary to identify the viable parts of the business and mechanisms whereby these can be sustained. This could be through a 'pre-packaged' administration process, which can only be undertaken with the agreement of all contractual stakeholders. It involves selling profitable and cash-generative contracts to a new company, thus offering the opportunity to fulfill client obligations, recover value in contracts and establish a base for a new business going forward.

6. Company voluntary agreement

An alternative to a 'pre-packaged' administration could be a company voluntary arrangement. This can leave owners and management in control of the existing business, but provides for the freezing of sums due to unsecured creditors in return for an agreed and affordable future contributions from future profits, and offers the opportunity for removal of costs.

7. Liquidation

If all other options have been exhausted, liquidation must be considered. This will protect your trade creditors, the bank and possibly the business's owners, through exposure to associated personal guarantees. It will prevent a business from suffering greater losses than necessary and may also protect the directors from a charge of wrongful trading.

Andrew Stoneman is managing partner at Meizies Corporate Restructuring.

May Gurney profit up 8%

May Gurney has pushed its pre-tax profit up 8% to ВЈ20.2m on a turnover of ВЈ470.3m (ВЈ437m) for the year ended 31 March 2009.

Meanwhile the company said that its orderbook, including framework agreements, stood at ВЈ1.25bn, up from ВЈ1.0bn in the previous year.

Commenting on the results, chief executive Philip Fellowes-Prynne said: "May Gurney's target markets have provien resilient in the current economic environment and we continue to benefit from good level future earnings visibility, with more than 95% of our business in dependable long-term contracts to deliver essential front-line services for our clients in both the public and regulated sectors."

Around 95% of the company's ВЈ470.3m turnover is in long-term public and regulated sector contracts.



York contractor William Birch wins £6.4m-worth of deals

York-based William Birch has won two contracts worth ВЈ6.4m.

The contractor has clinched a ВЈ3.4m deal to extend and refurbish the Carnegie Library in Harrogate, reports The Press.

And William Birch has also been awarded a ВЈ3m contract by Hambleton District Council to build a 2,100m2 Food Enterprise Centre, which will provide R&D facilities for the food industry.

The family-run firm was founded in 1874.

Kier appoints new Partnership Homes md

Kier has appointed Chris King as the managing director for its Partnership Homes division.

King will join Kier today from Lovell Partnership Homes where he was managing director for its Midlands region.

His appointment follows a recent restructure of the business.

King, who will be based in Tempsford, Bedfordshire, will be asked to build on the the existing private and social housing businesses to create a successful division offering mixed tenure housing over a range of developments and geographical areas. 

Kier Group chief executive John Dodds commented: “I am confident that Chris will be an asset to the business and, along with the rest of the Kier Partnership Homes team, will shape a division that meets the demands of today’s market place and is well positioned to take advantage of new opportunities as they emerge.” 

Doubts grow over eco-town plans

Housing minister Margaret Beckett said today it was possible that no eco-towns will end up being built if the government decides not to take forward any proposals.

At a joint press conference this morning with Yvette Cooper, chief secretary of the Treasury, Beckett said that work on eco-towns was progressing, with an announcement expected by the summer.

Estates Gazette said she would not say how many she expected there to be, but said: "I will say this: that if no schemes meet the standards required then there will not be any names coming forward.

"But, I would be very disappointed, and somewhat surprised, if that was the case."

She said they had deliberately slowed down the consultation due to the court challenge that was brought by opponents to the scheme, and that "much had been read into that".


Doubts grow over eco-town plans


However, Beckett said: "I am sorry in one sense that there are some proposals that have already been judged to be unlikely to reach the standards that we expect.

"But it’s got to meet high environmental standards, and I don’t regret the process."

The two ministers said they believed the gap between the economic policies of the two parties was "bigger now than at any point since before the Thatcher years".

Beckett said the Homes and Communities Agency was in the process of deciding which regeneration schemes would receive funding from the ВЈ400m Kickstart Housing Delivery Programme announced in the Budget in April.

Bids will be accepted until 8 June, with the successful bidders announced in July.

More than 30,000 people have registered their interest in the government’s HomeBuy Direct scheme, which aims to help first-time buyers by giving them an equity loan of 30% of the purchase price, which is funded between the government and the developer.