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Doug on the dig

Gordon Brown has pledged to spend his way out of recession and Crossrail executive chairman Douglas Oakervee looks set to be one of the biggest winners. He explains why the huge budget will be money well spent.

Economists still argue over the wisdom of tackling recession through debt-funded public investment in infrastructure projects, but Crossrail executive chairman Douglas Oakervee reckons it’s a no-brainer. "Money has got to be pumped into major infrastructure work to help the economy," he says, pointing to the expansion of the London Underground that was kick-started in response to the depression of the 1930s. "That is the intention of the Government now," he says, adding that the scheme also has all-party support. "The Prime Minister wants Crossrail. London Mayor Boris Johnson is saying to me 'when can I start digging?' We need Crossrail to be in place when the economy recovers."

Click here for Crossrail: The whole route

The fact that Lord Adonis, the new minister of state for transport, has been charged specifically with looking after Crossrail – as opposed to junior minister Tom Harris previously – means it has moved up a step politically.

Oakervee has a significant vested interest in taking that viewpoint. For after three years of negotiation, persuasion and explanation, Oakervee and his team gained Royal Assent for the Crossrail Hybrid Bill in July and at the same time secured a £15.9bn deal with the Government which should mean construction of the project starts in 2010. And given that getting to this stage is the culmination of some three decades of project gestation, the idea of any hold up now is perhaps understandably not to be entertained.

That said, Oakervee clearly also understands the need to make absolutely sure that Crossrail is "affordable" – that the £15.9bn of public money is spent eff ectively. "The word aff ordability in our strapline is not there as a joke. It is there because Crossrail would not have gone ahead unless it was affordable, this is still the affordable price for that job," he explains. "We came to the £15.9bn after very careful analysis of process and risk design and scope and have agreed that is the sum of money that has adequate contingency and inflation built in," he says. "We won’t go beyond £15.9bn."

As Oakervee has explained many times, he does not have the cash in the bank right now, but even the current financial downturn is no reason to think that the project will not plough straight ahead. In particular he dismisses suggestions that private sector financing for the Canary Wharf section and for Woolwich station, which is being built by housebuilder Berkeley Homes, means these sections could be at risk. Quite the opposite, he maintains, given the size of the prizes.

Similarly, although primary legislation is still required to allow the supplementary business rate to be levied on London firms to raise funds, there is no suggestion that recent events mean this will not happen. So for Oakervee the focus remains on delivering the project for the price and the scope agreed. "Yes we have seen major events in the [financial] world. But it hasn’t changed our mentality on this job – we have always been targeted internally to turn this job out for the best price possible," he explains.

Freezing the scope of the project is the key to achieving cost certainty. Although technically that will not occur until agreements are officially signed this month between Government, TFL and Cross London Rail Links to deliver the project, to all intents and purposes it has been. "The scope has been through huge scrutiny and rightly so, considering the amount of money being invested from the public purse," Oakervee says. "The absolute maximum is £15.9bn," he reiterates, adding with a smile, "we will always be looking for innovation and ways of doing things more economically and they will be prime motivators in all of the incentive schemes."

Of course, he is well aware that a downturn and corresponding fall in inflation will help his cause. As will the recent falls in commodity and oil prices aff ecting raw materials such as steel, copper and cement. Then there is the sudden increase in availability of labour as the building industry stutters, although Oakervee stresses that this in itself presents a challenge in terms of retraining these workers to work underground.

Now, therefore, is the time to get on with the job and Oakervee is committed to doing just that with a brace of tenders out already for key roles such as framework design, programme partner, delivery partner and the enabling works. Bids for the programme partner are being assessed. Whichever bidder wins this role will effectively work back-to-back with the Crossrail team to provide vital resources to oversee the whole project and ensure that programme, budget and scope targets are being met.

The tender is also out for the project delivery partner role and bids are due back before the end of the year. This role will focus on managing construction of the central tunnelled section of the route and the winner will be rewarded for delivering this to programme and budget. "The delivery partner will be given clear-cut objectives to deliver the works," Oakervee explains. "It will develop the designs with the framework contractors and the delivery partner will be very involved in the letting of the contracts. But the contracts will be with us."

In addition, bids are also due in for framework design contractors across seven categories. These framework suppliers will then bid competitively for all the design work across the project. "This is a complex programme of work not just a project. There is a multiplicity of packages to award over a long period of time," explains Oakervee, pointing out that it is of necessity a very different set up to that seen at, say, the recent Channel Tunnel Rail Link (CTRL) where a single design consortium was formed. "A single team is not possible. If we had a CTRL-type project then we might have gone that way, but we haven’t got that kind of project."

Oakervee is very keen, however, to see that so many consortia are already being formed by bidders. "It is interesting to see that they are collaborating and forming consortia because none of them feel they have the strength alone," he says. "We need a meld of people – leadership and experience of running big projects. But it’s chemistry among people that makes projects successful, not just having the best person here and the best person there. There has to be that same culture between us and the delivery partner to make sure that collectively we have the same objective and goal." Crucially, he adds, it will be written into contracts that key people stay on the job. Organisations putting up people for the bid as the "A team" then actually delivering the "C team" later will not be tolerated. Critical areas to resolve during the procurement process for Oakervee are to ensure that risk is properly allocated on the basis of "he who can manage it best takes the risks".

Alongside this is the need to fully resolve and plan the project logistics. Getting labour and materials on and off site without bringing the capital to a halt is as big a challenge, if not bigger, than the actual construction. Scheme design has been through an extensive peer review by 28 international experts and the original multi-disciplinary design consultants (MDCs) have just finished modifying the scheme designs in light of feedback before the design scope is frozen ahead of detailed design. In addition, four specialist panels are in place to advise and guide the design process in light of best practice, each of which, Oakervee explains, has the authority to challenge any aspect of the design and procurement process.

Already the reality of start of works is approaching with first Compulsory Purchase Order notices issued last month at Tottenham Court Road ahead of the redevelopment of this critical station. This station, along with all the London Underground (LUL) central stations with which Crossrail interfaces, is currently the subject of a major value engineering review with LUL. As Oakervee points out, from now to the end of construction he will be looking at all the ways he can to bring about value engineering to ensure best value for public money. "But we will not entertain any reduction in safety, efficiency or quality of the completed railway service," he says. "Innovation is the thing we have to work with – and that will be a partnership between us and the delivery partner and designers to deliver in the most efficient way to produce the best economies."

However, he emphasises that Crossrail will not be a test ground for new technologies. "We will be using proven technology, albeit at the leading edge. If you want to waste money, start research and development on a project." For him efficiency will come from thinking in different ways, not just about the design and construction process but for the whole life cost of the project. And, despite the clear and very serious pressures on the public purse, Oakervee maintains that it is not just about cutting cost for the sake of quality and service in the short term. "The need hasn’t changed, the economic crisis is a global crisis and the world is going to come out of it," he says. "If London is to keep its prominence then it needs this railway – for the same reasons we needed it yesterday we need it tomorrow. It is a question of getting on with it so that it is there for tomorrow. Crossrail is a wise investment."

Expert panel
The final say on design lies with the heads of the following panels:
David Orr - Procurement Former ICE president, former head of the Central Procurement Directorate in Northern Ireland
Hugh Norie - Tunnels Worked for Mott Parsons Gibb and headed the government’s project representative team for the High Speed 1 (HS1)
Phil Gaffney - Systems & Signalling Non-executive director of the Irish Railways and former operations director for the Hong Kong Mass-Transit Railway
Les Sparks, Ken Shuttleworth Architecture (managed by CABE) Sparks was director of Planning and Architecture at Birmingham City Council. Shuttleworth is a founder of Make Architects and former partner at Foster & Partners
Mike Rayner - Assurance Founder MWR Associates

TUBE LINES BOSS TO BE NEXT CROSSRAIL CHAIRMAN

Tube Lines chief executive Terry Morgan has been named as Doug Oakervee’s successor as Crossrail chairman.

Oakervee will remain in the role until Morgan takes over in November next year after serving a 12 month notice period with Underground contractor Tube Lines. Both men will now play a key role in appointing a chief executive for the project. Once the new chief executive has taken up the role, expected to be in February, Oakervee will switch from executive to non-executive chairman. Capital project: London is a major beneficiary of Gordon Brown’s pledge to spend his way out of recession

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