|
Olympic hopeful
Never trust an Olympic Delivery Authority until you
can see the white of its balance sheet. On the strength of this,
Tony Bingham is quite encouraged, actually
“If they hadn’t figured out the need for
that size contingency, I wouldn’t have touched this outfit with the
longest pole vaulter’s pole in the competition”
So, the Olympics is upon us. No, not
Beijing’s: London’s. Four years of work is under way –
50 projects worth £6bn. Want some? Nervous? Let me tell you
this: my confidence in the people running this show is actually
increasing. I even think they may know what they are doing.
Look, whether we build in Deptford or Dar es
Salaam, you and I know full well that programmes run late and
budgets run over. They are late by miles; overbudget by miles.
What are the people running the Olympic going to do about that?
Well, they intend to finish one year ahead of time, so that’s
three years to spend £6bn. That’s £40m a week. The secret to
building at that pace is to throw money at the problem. Come on,
you know that’s the trick.
My test for the Olympic bosses is to ask how
much of the £6bn is the build cost – bricks, scaffold, men,
diggers, QSs – and how much is contingency to be kept up their
sleeve? The Olympic £6bn includes £500m “to cope with early
financial pressures”, plus £238m for “wider security costs”. So
it’s £5.4bn for the build costs.
But digging some more shows these Olympians
have wisdom. Lurking there is “the project contingency” of
another £973m. Then, further up the sleeve is another £1bn to
meet “residual risks”. And this is where I gain confidence.
These folk have had the heavenly wisdom, the courage, to have a
build cost of £5.4bn and a contingency fund of another £2.5bn.
That tells me this team knows the ropes at the top end of
construction. And if they hadn’t figured out the need for that
size contingency, I wouldn’t have touched this outfit with the
longest pole vaulter’s pole in the competition. But no. Come on.
Embrace this thing. Let’s get involved.
And there is more. I even reckon they have
realised that buildings are actually built by a whole bunch of
tiddler-sized subcontractors. Realised, too, that if this end of
the business is not treated with a fair payment regime then the
game is up. They are putting in very special measures to support
the “real” end of the business. Let me come back to that.
Meanwhile, let’s look at the scale of the
thing. There are nine projects tackling the enabling works. They
began 18 months ago and will finish in September 2009. There are
16 projects for the venues, including: The main stadium, being
built by Sir Robert McAlpine for £500m, to be completed by April 2011. That has been on site one month.
Then there is the aquatics centre, being
built by Balfour Beatty for £300m, starting September 2008 and
ending August 2011.
Then there is the velopark, indoor sports
arena and broadcast centre, all to be done by April 2011. On top
of that is the Olympic village £1bn, a massive road network and
more besides.
It’s true that Sir Robert McAlpine and
Balfour Beatty were not overwhelmed by a list of competitors.
There was, how shall we put it, a low level of interest that
stemmed from the perceived risk of taking on a high-profile contract in the UK public
sector, especially when there was considerable uncertainty about
the required design … So, the Olympics folk are keen to focus on
a system where the subcontract folk seek to detect savings.
But be careful please: it is not always
satisfactory to pass “design dilemmas” down to someone who is
trying to beat the hell out of a tight price. To be even more
blunt, you will not know if the subcontractor is a qualified
engineer or architect or even knows one. So by all means let’s
have the subcontractor building £5bn worth of work but not
designing it, eh?
Now I have a plea to make. It is to the
Olympic Delivery Authority and their partners Hill, Laing
O’Rourke and Mace. Not one of you has consulted the specialist
contractor world … at least not yet. All of the subcontractor
trades are represented by trade associations and institutes;
it’s time to call them together. High time, and begin with the
National Specialist Contractors Council. Go to all the other
associations. Arrange a symposium. Let’s have a look at what’s
to be done to win a huge pat on the back for building… and not
use one penny of what’s up your sleeve.
Oh, and invite me to come too.
Readers are invited to forward recent
judgments for reporting in this column (with full
acknowledgement) to: Tony Bingham, 3 Paper Buildings, Temple,
London EC4Y 7EU. DX: 37164 Biggleswade
Top
|
