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UK Major Projects Pipeline Update

We last sent out an update on the UK major projects pipeline back in September. Last September feels like a very long time ago. A lot of things have happened in the world since last autumn (Brexit progress not included).

So how much has changed amongst the UK’s largest infrastructure projects? Which has seen progression and which are facing obstacles?

Rail

Crossrail 1

Originally due to be finished by last December, it’s no secret that Crossrail has come under fire for its increasing delays and price hikes. Last month, Chief Executive Mark Wild announced that the company had earmarked a six month delivery window for the £17.8bn scheme “with a midpoint at the end of 2020” meaning Crossrail should be up and running between October 2020 and March 2021.

Bond Street station on the other hand is around a year behind schedule compared to the rest of the project’s stations because of extensive tunnelling delays.

Meanwhile, Graham has been awarded the contract to upgrade the last three remaining Network Rail-owned Crossrail stations on the western section of the line; Acton Main Line, West Ealing and Ealing Broadway.

From a recruitment perspective, the NAO revealed in their report last week that Crossrail have struggled to recruit the skills required to complete the project. Crossrail has 143 vacancies in its central delivery teams, including project delivery teams to work with main contractors to deliver the programme*.

HS2

HS2 has also been hit by more delays and setbacks.

The start date for delivery of the main civils works has been pushed back again as contractors struggle to keep the project to its £6.6bn target cost for the main civils portion. HS2 have not revealed an estimate for the revised start date, just saying “later this year”.

The delay is to provide the contractor JV’s with additional time to optimise their designs and bring costs down.

The wider impacts of these delays on the industry are substantial, as many contractors have been gearing up their workloads for the construction phase – where significantly increased staff numbers will be required to deliver the project.

The stations contracts for Euston and Old Oak Common have been awarded, subject to a High Court claim from Bechtel regarding the procurement decision for Old Oak Common. Mace and Dragados S.A will oversee the work at Euston, and Balfour Beatty, Vinci Constructions, and Systra will construct the Old Oak Common station.

Aviation

Heathrow Expansion

Heathrow jumped another hurdle last week, when it was announced that campaigners against the airports expansion plan lost their bid to block plans at the Judicial Review. Lord Justice Hickinbottom, sitting with Mr Justice Holgate, said in the ruling: ‘We understand that these claims involve underlying issues upon which the parties – and indeed many members of the public – hold strong and sincere views.

‘There was a tendency for the substance of the parties’ positions to take more of a centre stage than perhaps it should have done, in a hearing that was only concerned with the legality, and not the merits, of the Airports National Policy Statement.’

Heathrow also revealed in March the shortlisted sites for logistics hubs in the running to deliver expansion project. The final four sites will become offsite construction centres that will help to deliver Britain’s new runway, meaning that jobs will be spread out across the UK.

We have also seen a rise in recruitment activity, with Heathrow appointing several key Directors to the expansion team over the past couple of months.

Stansted Airport

Back in January Stansted appointed Mace as the main contractor for the construction of its new £150M, 39,000m³ arrivals terminal. Work on the main terminal is due to start early next year and will be due for completion July 2021.

Water

AMP 7

The 7th Asset Management Period is due to run from 2020 to 2025 and many of the water companies have begun to announce contract awards for their new frameworks;

Severn Trent were amongst the first to announce the winning contractors on its AMP7 civil and design contracts. Amey, Costain, Murphy, Mott MacDonald Bentley JV, MWH Treatment, nmcn (formerly North Midland Construction), VolkerStevin and Atkins have all been named on the design and build framework. Meanwhile, Barhale, Coffey, CPC Civil, Forkers, GEDA, JN Bentley, Kier, MWH Treatment, nmcn and VolkerStevin make up Severn Trent’s civils framework.

Arup and Costain have jointly won a health and safety assurance framework contract as part of Yorkshire Water’s capital investment programme for AMP7.

South West Water announced that nmcn Ltd had won the £225m sole-contractor deal to deliver their civils works framework.

United Utilities has awarded three, five-year contracts worth £17 million per year to Sapphire Utility Solutions. The contracts are for; core repair and maintenance wastewater works in the North region, wastewater minor civils works and wastewater major civils works.

Thames Tideway

Thames Tideway is now 40% complete having built seven new pieces of land in the Thames, including at Chelsea, Blackfriars and Putney, and digging five giant shafts up to 50m deep below London.

A workforce of more than 2,000 are currently working underground to create the 25km-long tunnel. The first kilometre from Battersea to Chelsea was completed at the end of March and two other huge tunnelling machines have also started their journeys.

The project is reportedly set to be 8% over budget, but is still on track to be completed on time in 2024.

Highways

RIS1

The current investment period which is due to finish in 2020 promised 60 schemes starting in its fifth and final year (compared to 10 schemes in the previous year) and it seems that Highways England may have bitten off more than they can chew.

Plans to improve 11 main roads are to be paused indefinitely because the investment could no longer be justified, and a third of the upgrades will be delayed, possibly for five years, for fear of overloading the network with too many works at the same time.

Of the original 112 schemes 29 have been completed, 15 are under way and 18 are expected to start this year. It is anticipated that a further 37 projects will begin in the next five-year cycle, including the A303 upgrade.

Lower Thames Crossing

Plans for the new Lower Thames Crossing are coming along; a preferred route has been announced, ground investigations have started, the largest ever consultation for a road project has taken place and tender information was published to engage suppliers for the up to £6.8bn scheme.

This comes amid setbacks around how it will be funded. Originally Lower Thames Crossing was to be funded through PFI, but following the surprise announcement that PFI schemes are to be scrapped in the autumn budget last year, Highways England revealed that the project will be wholly publically funded.

Although a full breakdown has not yet been published, most of the funding for the project has already been accounted for in the RIS2 budget.

A14

The £1.5bn A14 Cambridge to Huntingdon improvement scheme began works in 2016 and is expected to open to traffic by the end of 2020.

A lot of the main works are now completed, and one of the most complex parts of the scheme, the new Bar Hill junction, is due to move in to the next stage of construction this summer, with work taking place to switch traffic from the existing bridge onto one of the new bridges.

Energy

Horizon Wylfa Newydd

Talks between Hitachi and UK government broke down with no agreement reached on strike price and financing. Work at Wylfa Newydd was then suspended in January by Hitachi and MP’s are encouraging Hitachi to sell the site if it is not prepared to resume work.

About 9,000 workers had been expected to be involved in building the two nuclear reactors, which were due to be operational by the mid-2020s. EDF have already started snapping up apprentices from the scheme to continue their training as part of the construction of Hinkley Point C.

Hinkley Point C

Hinkley has been through considerable stop-start in the previous five years but now seems to be progressing well through construction delivery. Aberdeen-headquartered Wood has recently been appointed as a special advisor for construction, responsible for helping mitigate design risks and implementing construction regulations as part of the technical management and acceptance team.

Moorside Nuclear

The troubled nuclear project was abandoned last year after Toshiba failed to find a buyer for the scheme. However, the door has been left open to a Chinese state-backed company getting involved in a bid to take over.

Offshore Wind

The Crown Estate recently reported that 2018 was “another year of record growth” for the sector, bested only by China.

Construction finished at the Walney Extension development in the Irish Sea last year, making it the world’s largest operational wind farm. And construction began at Hornsea One, a project which is set to overtake Walney as the world’s largest offshore wind farm when it becomes fully commissioned in 2020.

The Crown Estate has also updated how it approaches offshore wind leasing. A new tender requirement has been introduced to ensure that projects are awarded across a minimum of three seabed regions, to help facilitate greater geographic diversity of the pipeline.

Lease terms have also been increased from 50 to 60 years.

The next round of leasing (round four) will take place after the summer.

Building

The Palace of Westminster Restoration Project

The renovation works are scheduled to start in 2025 with the hope Parliament will return to its home in the early 2030s, but it is already anticipated that the repair work is likely to take between five and eight years longer than previously forecast.

Earlier this week the Government introduced its Parliamentary Buildings (Restoration and Renewal) Bill, meaning the Restoration and Renewal Programme will be delivered in a similar way to the 2012 London Olympics. A Sponsor Body; made up of parliamentary and external members, and a Delivery Authority to keep costs down and manage a project of this complexity, will be established.

There’s a lot going on in transport and infrastructure this year and the projects mentioned above barely scratch the surface.

 

Will you looking for senior executives for your project teams in the near future?

By Jim Newsom13th May 2019

Author: Jim Newsom

Jim Newsom leads our work in construction and infrastructure having worked in executive search since 1998, recruiting for both public and private sector companies in infrastructure, transport, engineering and construction. Prior to forming Newsom Consulting, Jim spent 11 years working for the one of the UK’s largest independently owned executive recruiters and then two years at a boutique search firm. Jim is a graduate in civil engineering from Liverpool University.

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