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Changing the game

Last month a group of industry heavyweights got together with NCE to thrash out how using specialist construction equipment can improve the efficiency of major infrastructure projects. The verdict was somewhat surprising. Mark Hansford reports on the first of NCE’s 2013 Boosting Infrastructure Efficiency round table debates.

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Hill’s challenge: HS2 Ltd delivery director Roy Hill says innovation is essential if the project is to meet delivery targets

Less than a month into 2013, the construction industry received a major boost with news that the government is to accelerate development of the second phase of High Speed 2 (HS2) (News last week) It is, of course, a massive programme of work, and one that rolls on relentlessly with a hybrid bill for phase one due to go before Parliament later this year with the aim of obtaining Royal Assent in 2015 and getting construction started in 2016/17.

“We will need consultants, contractors and suppliers to come up with ideas to ensure we can deliver theses savings”

Roy Hill, HS2 Ltd

So it was timely indeed that Roy Hill, High Speed Two Ltd’s delivery director for that first London to West Midlands section, was on hand at NCE’s first Boosting Infrastructure Efficiency round table of the year to make it unequivocally clear what he, and other clients like him, will be looking for from the industry when it comes to delivering efficiencies.

“We’ve got some big, big projects coming - High Speed 2, Thames Tideway Tunnel. What I need, we need, is for the supply chain to come up with ideas,” he added. “We are fully signed up to Infrastructure UK’s efficiency challenge,” he said, referring to the Treasury body’s initiative to cut 20% off the cost of capital projects.

“So we will need consultants, contractors and suppliers to come up with ideas to ensure we deliver those savings. So if there’s a barrier to that, we need to know about it now.”

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AKT’s Gerry O’Brien:

Hill’s intervention came not 10 minutes into a debate that was already heading into well-charted waters of suppliers complaining of the difficulties in getting their innovative ideas heard at the top table and of contractors being unwilling to share ideas lest they be stolen.

As RMD Kwikform managing director Mike Follett said: “The challenge I’d make is to the larger contractors, that as management contractors they are not paying enough attention to how we engineer. And so innovation disappears. You are not paying enough attention to that calculation.”

“When we can commoditise and package up work, we do, but on complex projects we are thinking very differently”

Darren James, Costain

RMD is coming from a position of knowledge. As commercial director Roger Bafico explained, RMD has been involved right from the start in the major consortiums that are developing gravity base foundation system for use in deep water Round 3 offshore wind farm construction.

As a partner in these consortiums, RMD has offered expert knowledge on insitu and precast concrete construction which has ensured the base solutions make full use of standard components where possible.

“It’s all about us, the supply chain, getting in early; way back at the design stage,” he said.

Follett’s challenge was promptly taken up by Costain managing director for infrastructure Darren James, who, as head of a major contractor that does regularly subcontract the actual construction activity, recognised Follett’s concern. “You are probably right,” he conceded. “When we can commoditise and package up work, we do,” he said, “but on complex projects like [the] London Bridge [station redevelopment] we are thinking very differently, for example, about how temporary works influence permanent works.”

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Follet’s view: RMD’s Mike Follet (right) says suppliers are not engaged nearly enough

Costain is main contractor on the £450M rebuild of the London terminus, described by client Network Rail as “one of the most technically demanding projects ever undertaken” on its railway.

James said the approach to specialist equipment would be similar to that used by the Costain/Skanska joint venture on Crossrail’s Bond Street station. There, the formwork solution is key to the top down construction method being used to construct the two deep station boxes; one is a secant piled box that is being excavated and propped and the other a diaphragm walled box that will be excavated at a later date. This would not have been possible had the supply chain not been engaged, he said.

Kier Group director Steve Underwood also emphasised the importance his firm still places on temporary works. “We’ve had to retain an enormous design competency in-house to protect ourselves from risks on the big projects we are winning,” he said. “Without temporary works, we are nothing.”

But Underwood accepted that there was a challenge getting this knowledge shared; an issue very much on the mind of Chris Pateman, Crossrail’s Bond Street project manager. “How are we going to learn off each other when everyone is in competition?” he asked.

“We need to get the best team of people on board early, set them the challenge and then they will deliver”

David Tarrant, Mott MacDonald

“There are a lot of answers outthere but how are we going to share them? We are trying to get the ideas out all the time.”

Alliancing was immediately thrown up as the answer by Bam Nuttall director Ian Parish and Amey business development director Mark Brown. “Alliances are a positive addition,” noted Parish. “In a tender situation we do tend to keep our best ideas to ourselves; once in alliance we do tend to open up.”

“The notion of alliancing is key,” added Brown. “And I am in no doubt that the innovation in my company comes from working on PFIs.”

Barhale director Paul Underwood said he was “fortunate” in that water industry AMP frameworks, such as Anglian Water’s @one Alliance, “lend themselves to innovation” as they provide a longer term outlook and enable improved collaboration.

Set up in 2004 for AMP4 and retained for AMP5, the @one Alliance is a collaborative organisation comprising Anglian Water Engineering and six industry suppliers: Balfour Beatty, Barhale, Black & Veatch, Grontmij, MWH, Skanska and Jacobs. Come the end of AMP5 it will have been together as a team for a decade - plenty long enough for a return on investment in innovations.

Such thinking is emerging elsewhere. The kind of early contractor involvement being championed by Crossrail and London Underground drew widespread approval from the round table guests.

“Early involvement is key as we can then manage some of the risks and better influence the outcome,” summed up Martin Pedley, managing director of Cementation Skanska.

“The Optimised Contractor Involvement (OCI) approach used in Crossrail is one of the best ways to get innovation,” noted James. On Crossrail, contractors were asked to price work based on approved designs, then once appointed, contractors entered the OCI process to value engineer the designs.

“OCI was a good process and worked well for individual contracts,” noted Parish.

London Underground is going further. James said he was “very encouraged” by the Incentivised Contractor Engagement approach currently being trialled by London Underground (LUL) on its £500M Bank Station upgrade project. There, it will consider rewarding contractors for their ideas if they are used in the final solution. Bids have just been submitted and LUL is preparing a shortlist.

“Procurement is the key to the whole issue,” said Parish. “The procurement process has got to allow time for flexibility in design; specialist subcontractors and designers have got to be involved.”

AKT II partner Gerry O’Brien shared Parish’s view. “The pressure for efficiency should drive innovation. Inappropriate timetables strip opportunities away,” he said.

Mott MacDonald director David Tarrant was in full accord. “How often is it that as a designer you are faced with a situation where you have got to get a design out quickly so you have to fall back onto the tried and tested?” he asked. “There just isn’t enough time to think it through.

“Instead we need to get the best team of people on board early, set them the challenge and then they will deliver,” he said, joining Barhale’s Underwood in praise of Anglian’s @one Alliance.

As Follett reiterated: “We don’t see involvement early enough. Programmes get condensed. We don’t have time to contribute.”

It was clear that while some clients such as Anglian Water, LUL and Crossrail lead the way, others are somewhat further behind in this evolution. The harsh recession and squeeze on public sector spending has not helped, noted RMD Kwikform strategic planning manager John Warne.

“We hit the recession and went back to old attitudes,” he noted. “Let’s get back to working projects through with the whole project team.”

“I see all clients ramping up to being an intelligent client,” observed James. “They are all on a journey.”

“Some clients perceive they are driving innovation and challenging the status quo when really they’re not,” said Barhale’s Underwood. “Too often it is a competitive play-off against players to drive short term improvement, and insufficient attention is placed on value and asset lifecycle management.”

“I totally concur,” said Hill. Formerly European managing director of CH2M Hill, he has seen both sides of the coin. “With many clients it’s all about price,” he said. “But when you flip the coin, as I have now, you see that it’s all about value.”

For him, with pressure at the highest level to deliver to time, that value means finding time savings through innovation. “We are working to a very aggressive programme to build [HS2]. I need the people in this room to create time in this programme. Innovation is needed now.”

And to get that value and innovation, Hill and HS2 Ltd are not just talking the talk. They are walking the walk too, getting contractors and suppliers in at that early stage they crave.

“When has a contractor been involved at 2% design complete stage?” asked Hill. “We have done that and that’s never happened before.”

James vouched for that. His firm is supporting Arup in producing preliminary designs for a redeveloped Euston station.

“HS2 Ltd asked contractors to go out and form teams to provide solutions,” said James. “We made a conscious decision to support the primary consultants on phase one and now we have up to 22 people involved full time to ensure that Euston has all the learning from our work on other major London stations such as Farringdon, Bond Street and London Bridge.”

That said, Costain is employed on a fee earned basis, a luxury perhaps not traditionally afforded to suppliers further down the supply chain and a fact that did not go unnoticed by others around the table.

But Hill does not accept excuses from anyone who thinks their innovative idea might not be heard, or that their efforts might have to be altruistic.

“We really have a different approach here,” he said. “We have everybody involved in our efficiency challenge; it’s an open door; it’s our culture. So what do you want?” he challenged.

With four years to go until construction gets underway, “now is the best time to innovate”, he stressed, adding that if it doesn’t come, then as an industry, “we have only got ourselves to blame”.

“I really can’t stress enough that HS2 Ltd is a game changing organisation and if you don’t take that opportunity you won’t get it again,” he said.

So the message to the supply chain is clear - come forward with your innovation and you will be heard.

 

Participants

  • Gerry O’Brien partner, AKT II
  • Ian Parish director, Bam Nuttall
  • Paul Underwood director, Barhale Construction plc
  • Darren James managing director infrastructure, Costain
  • Chris Pateman project manager, Crossrail Bond Street
  • Roy Hill director, High Speed 2 Ltd
  • Steve Underwood director, Kier
  • David Tarrant director, highways, Mott MacDonald
  • Martin Pedley managing director, Cementation Skanska
  • Mark Brown business development director, Amey
  • Mike Follett managing director, RMD Kwikform
  • Roger Bafico commercial director, RMD Kwikform
  • John Warne strategic planning manager, RMD Kwikform
  • Antony Oliver editor, NCE
  • Mark Hansford deputy editor, NCE

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