HS2 sets contracts league on fire
September 06, 2017 – The BCLive contracts league table for August 2017 was totally dominated by the award of £6.6bn of civil engineering contracts for the HS2 rail project.
The HS2 contracts made it a record month for UK contract awards but Builders Conference chief executive Neil Edwards, who has been compiling this data for many years now, sees cause for concern behind the blockbuster headline.
In total, August 2017 saw £11.26bn worth of new contract awards in the UK, nearly three times the £4bn recent average monthly total.
Never before has the BCLive league table passed the £10bn mark.
However, while the value was high, the number was low; there were actually fewer construction contracts than usual signed in August.
The £11.26bn monthly total was accomplished with less than 450 new contract awards when 500 to 600 is the established norm. And that total was achieved by 267 different contractors when most months include figures from 330 companies or more.
It may be that when those big HS2 contracts get under way, work will trickle down the industry to tier two and three contractors, sharing the bounty. But for now, the winners are winning big but the number of losers looks to be growing.
Or as Neil Edwards says: “The HS2 contract awards are a freak, an anomaly. Those HS2 figures… paint a largely false picture. Those companies that missed out on being part of this round of HS2, and those that could see employees jumping ship to join the HS2 bandwagon, will certainly not be celebrating any time soon.
Thanks purely to HS2, top of the BCLive league table for August 2017 was the BBV joint venture – comprising Balfour Beatty & Vinci Group – which bagged two parts of the Area North section of the HS2 build valued at £1.5bn and £1.32bn respectively.
The SCS joint venture comprising Skanska YK, Costain & Strabag also bagged an HS2 double with the S2 Northolt Tunnel section valued at £1.1bn and the S1 Euston Tunnel section valued at £740m. This propelled SCS to number two in the contracts league for the month.
Third and fourth spots were taken by the other winning HS2 joinbt ventures.
CEK (Carillion, Eiffage, Kier) notched up a £724m contract for the C2 North Portal Chiltern Tunnel section together with a £616m award for the construction of the C3 Brackley to South Portal portion.
Align (Bouygues, VolkerFitzpatrick & Sir Robert McAlpine) collected the £965m contract for the C1 Chiltern Twin Tunnels and Colne Valley Viaduct section to take fourth spot.
Laing O’Rourke was the highest-placed company to make the upper echelons of the BCLive league table independently this month, thanks to a £700m contract at Manchester Airport.
Sir Robert McAlpine won four new contracts worth a combined £247m to take the number six spot. The largest of these was for the refurbishment and repair of Nottingham’s Broad March shopping centre.
But Neil Edwards says that it is the news below the month’s headlines that provide the greatest insight into the true state of the UK construction sector. Morgan Sindall is almost always in the BCLive league table Top 10, often winning 20+ contracts every month. In August Morgan Sindall bagged 14 contracts worth a combined total of £85.4m.