John Armitt began his presidential year by questioning the very structure of the industry. It was a challenging start from a president whose views demand attention.
“Can you name another industry that separates design from manufacture?” he challenged the great and the good assembled at the ICE for his Presidential Address last November, before setting out his long-held belief that in-house teams within contracting organisations yield better designs. This was something he tested personally – with great success – on the Second Severn Crossing.
There, he explained, he specifically sought out a French contractor to JV with his John Laing because he believed the European model of contractors with their own in-house design capabilities was the way to get better, more buildable projects.
In-house contractor design
Since then he has travelled the UK and the world visiting projects great and small. Has the experience changed his opinion? Not a bit of it. If anything, it’s strengthened his belief around the French model, with other Continental industries adding to his argument.
“I still hold to that,” he says, speaking to New Civil Engineer in late September.
“And speaking to some chairmen of some Spanish contractors they too say it’s difficult to work at times with UK contractors,” he adds, before paraphrasing their concern: “Our objective is to find ways to better engineer schemes. Our UK partners are more focused on the terms and conditions of contract and the commercial side,” he says they say. “Fundamentally it’s a different culture,” he adds.
These big Europeans all own assets, so they are seeing things in a totally holistic way
The fact that many of the big European contractors – whether Spanish or French – own a lot of infrastructure assets themselves makes a big difference, adds Armitt.
“These big Europeans all own assets – so they are seeing things in a totally holistic way,” he explains.
Armitt is desperate to see UK contractors taking more interest in the front end of projects and being more focused on project outcomes. But little he has seen in his year as president seems to make him believe it will happen.
What do contractors want?
“Do UK contractors really have that desire? And do they feel encouraged?” he asks. Armitt reflects on the UK model where contractors are generally asked by clients to deliver what is already designed and, where they are increasingly, asked to simply “integrate” and manage a series of subcontractors to actually do the construction. He is unsurprised that, with that model, that there is little appetite for risk or focus on the outcomes.
Next month the ICE will publish the results of a year-long study into procurement and the structure of the industry, with the idea to offer up a potential new model built on alliancing and other procurement initiatives that are very much outcome-focused. It is set to challenge the role of all conventional players – client, consultant, main contractor, subcontractor and supplier.
But there are no easy answers.
Specialisms are more lucrative
“You can see where the money is made in contracting – it’s in the specialist work. So if you’ve got several specialisms within your group then you get several bites at it. But as an integrator you might just get a relatively low fee for relatively low risk work,” he says. “It’s not necessarily fair to expect a contractor to take lots of risk to integrate others.”
Another major ICE-led initiative that will see the light of day in the coming weeks is the National Needs Assessment. Hopefully, prime minister Teresa May can hold fire on any major infrastructure decisions until then.
If you give all the cash to the regions, is there enough cash left for the big stuff?
Because this ICE and Sir John Armitt-led work could be very influential. The assessment is a cross-sector policy review of the UK’s national economic infrastructure needs to 2050. Coordinated by the ICE, it covers energy, transport, communications, housing, water, waste and flooding.
The comprehensive nature of the remit is significant as it is expected that its findings will be fed into the government-backed National Infrastructure Commission’s National Infrastructure Assessment.
Infrastructure needs assessment
The ICE has approached the task of co-ordinating the Needs Assessment with rigor.
A call for evidence yielded more than 50 submissions and several strategic options have been tested using modelling devised by the UK Infrastructure Transitions Research Consortium, a research group featuring the UK’s biggest civil engineering consultants, contractors and clients.
So it is promising to be an assessment that will challenge some thinking and hopefully trigger debate at all levels about which are the right schemes to prioritise.
Engineers must engage more
“The engineer’s role is to talk to the public a lot more and understand the expectations,” observes Armitt. “If you can show to a politician that a person is going to vote for him or her [because of an investment decision], I think that’s quite important,” he notes.
Armitt accepts that at a national level it can be difficult to get the attention of politicians, and that maybe the solution is to give greater freedom of funding to devolved regions.
But he does caution against too much devolution.
“If you give all the funding to the regions, is there enough cash left for the big stuff?” he asks. And in particular, is there enough cash left for roads.
Unless of course you find other ways to fund them.
“Do you use the power of the market?” he asks. “Do you use it in the most contentious place of all – road space?” he further challenges. Again, this references the European model, where paying for road use is standard practice.
The expected arrival of autonomous vehicles throws up further questions. Armitt says the growth in car use versus rail use just highlights the sheer desire of people to travel in their own personal space. “Will autonomous vehicles reduce that desire or increase that desire as everybody wants one?” he asks. “The difficulty for the railway is that while there is insatiable demand, particularly around the big cities, it still only accounts for 12% of journeys made.”
Making most of corridors
Armitt says the outcome of the Oxford to Cambridge corridor study will be intriguing as a first real look at how future city to city connectivity may look.
He also stresses that the study has to view the corridor as more than a transport corridor. “It is not just a transport corridor. I continue to argue that housing needs to be part of any integrated plan,” he says. Housing is the one glaring omission from the National Infrastructure Commission’s remit, something Commissioner Armitt is well aware of.
“The National Infrastructure Commission will continue to lobby,” he comments. “We cannot be totally silent on it.
Shift in thinking
“There is no evidence that the housing sector is structured to meet the forecasted demand and we are going to need a shift in public sector thinking,” he adds.
That shift in thinking may be underway. Armitt was speaking ahead of this month’s Conservative Party conference, where new chancellor Philip Hammond set out plans to boost spending on housing, with more details to come in his Autumn Statement.
That, to Armitt, is sure to be received as good news. But it’s fair to say Armitt really only wants our politicians to get one thing right right now.
“This is the most important project the government has negotiated in the last 50 years,” he emphasises. “It is more important than any infrastructure project we are currently talking about – but is being tackled with little or no cross-party support and without any governance,” he adds.
He’s clearly concerned.
So how does he sum up his presidential year – a mixed bag of a year where ICE members voted decisively to broaden the ICE’s membership, but also a year where the UK voted to leave the European Union, and a year where major project decisions have stalled as a result.
Major projects to come
Armitt is a big fan of High Speed 2 and the third Heathrow runway – and would like to see them both approved and underway without delay. And he remains hopeful of both.
“The challenges don’t get any less, that’s for sure. But there are lots of reasons to be optimistic,” he says.
And it is, as is often the case, the youth that is giving him this encouragement. “Wherever you go it is the under 30s who are so impressive. They’re the ones engaging in the debate and going into schools,” he adds.