SUPPLY CHAIN integration will be the key to winning the battle for water company work in the five year spending cycle from 2010 to 2015, industry insiders predicted this week.
ncreasing water company demands for supplier efficiency will also force consultants to gain contracting expertise while contractors will have to take on more design staff.
The comments came as consultant Black & Veatch (B&V) confi med that it had bought contractor Gleeson for £36M.
The move unites two of the sector's largest companies (NCE news alert Friday 20 October).
'We will now have a totally integrated team that can serve the client through concept to commissioning, ' said former Gleeson manging director and new Black & Veatch water UK managing director Tony Collins.
'We will prove to clients that this model outperforms what we were doing individually, ' he said.
Together B&V and Gleeson are working for 22 of the 25 water companies including all of the water and sewerage firms.
ther senior consultants agreed the combined designer/ contractor model was becoming more popular within water companies as efficiency targets become harder to meet.
'Whether the industry wants it or not there is going to have to be much more of the 'smart contractor' doing work on the massive AMP5 capital investment programme, ' said one.
Much of the water industry workload over the next 10 years is expected to focus on capital maintenance rather than new build, meaning that much of the scope for saving money lies with contractors.
Last year B&V restructured its UK arm to increase profitability. This included the closure of Black & Veatch Contracting's former head offi ce in Isleworth and a management restructure involving slimming down of the management team (NCE 1 September 2005).
'B&V has turned a corner in the UK from where it had been.
We are delighted and it's one of the reasons that we are poised for expansion, ' said B&V water president Dan McCarthy.
'Turnover is up 16% from £750M in 2004 to £870M in 2005.
We are very bullish about our future, ' he said.
The company is seeking to grow aggressively and plans to expand the new business into the energy and telecoms sectors.
'We are interested not just in water. Energy and telecoms are both exciting to us. Gleeson were also strategically looking at getting into these businesses, ' said McCarthy.
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