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Driving project delivery across seven airports

Rob Stewart, BAA construction director
interview by Antony Oliver

The complexity and variety of work to transform BAA’s airports means working closer than ever before with the supply chain.

As construction director for BAA’s Capital Projects division, the planned £6.6bn spend across seven airports over the next five years presents Rob Stewart with significant challenges.

But, as he points out, it also represents a big opportunity for BAA to continue its track record of driving forward construction’s innovation, efficiency, health and safety excellence and environmental performance. All this starts with the right procurement process and in particular, choosing the right partners .

“For the last 15 years BAA has been very clear about how we want to buy services from our supply chain,” he says. “We started in 1992 with a focus around predictable performance from long term frameworks, then in 2000 moved to a second generation of frameworks and the T5 agreement which saw BAA control costs by taking on project risk.”

He is now ushering in a third generation of frameworks with the aim of delivering “value in partnership” throughout this planned Q5 five year programme which, he explains, draws on the lessons of the past. “From the start it was clear that there was a huge variety of projects and complexity in the current programme,” he explains. “Therefore a segmented approach to delivering that plan was going to be necessary.” He adds: “We have now assembled the first tier supply chain that we hope will deliver the capital plan over the next 10 years. BAA will then be free to focus on what we do best which is to define what we require, when we require it and understand what it takes to deliver it in a live operating airport.”

Stewart has a big job. As well as his group wide responsibilities for construction health and safety, environmental performance, delivery process and resourcing across the entire programme, he also has line accountability for the delivery of the £2.1bn programme outside Heathrow. But he is well used to projects of this scale, having been with BAA for 19 years. Prior to his latest role he was commercial director for the £4.3bn T5 programme and accountable for all contractual and commercial relationships with suppliers.

The transfer of learning from T5 and other BAA projects is, he says, crucial, not least in the critical area of programme and project managers. “Developing and motivating a team of project managers and construction professionals is a substantial challenge for us,” he points out.

 

Our approach will be consistent with all that was successful about the delivery of T5 butrecognising the different challenges we face in delivering these projects

Rob Stewart, BAA construction director

 

But Stewart also has experience at the sharp end of project delivery. As head of infrastructure on the T5 programme he was in charge of £1.3bn of civils work and was responsible for construction start-up on the project. This meant that he gained vast experience in construction logistics and in getting the best out of people.

BAA’s new programme will be a test, not least since there are likely to be major industry-wide issues to manage over the next five years, including the effect of construction inflation, shortage of staff and resources and the impact of consolidation in the market. “It is inevitable that we will see further consolidation of the supply chain and where we don’t see consolidation we will see more strategic alliances, particularly on larger projects,” he says pointing out that he will seek to leverage any such alliances on smaller projects.

Throughout the next five years Stewart will also be wrestling with the constraints set out by the CAA regulatory settlement for Heathrow and Gatwick which demand a host of measures to be hit such as trigger milestones, cost benchmarks, inflationary limits. Significantly, airlines will be compensated if BAA fails to deliver on its capital milestones.

A list of 24 triggers at Heathrow means that £278M worth of revenue is at stake if BAA fails to supply the anticipated projects and a further 10 triggers at Gatwick resulting in £57M of revenue at stake. In addition, if key elements of the airport operations are disrupted, BAA will be required to pay service quality rebates. “Quite clearly when biting off £6.6bn worth of investment it is extremely important to break it down into manageable chunks,” he explains. “It is a vital step towards ensuring that all the construction is achieved without any disruption to BAA’s core business, namely running airports.”

£2.1bn

BAA Capital Projects construction director Rob Stewart has line accountability for all airport programmes outside Heathrow  

 

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