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Letters: Egan’s ideals are alive and well in the insurance sector

The main point:

Excellence: But will clients pay a premium?

Excellence: But will clients pay a premium?

It was disappointing to read the article suggesting that the concept of “rethinking construction” had been a failure (NCE last week). From my perspective, this isn’t the case.

As a chartered engineer, my career took me down a relatively untrodden path − from understanding principles of engineering, to recognising that failure was usually due to some error which was normally insured, and from there into the insurance industry.

Insurers had as many, if not more, issues in terms of efficiency, quality and profitability. In addition, there are also customer issues to focus on, in what is a predominantly customer facing industry.

On average UK insurers incur £2bn of property repair costs a year, more in a year of major floods, and as such are key stakeholders in the wider construction industry.

Insurers directly took [Sir John] Egan’s ideas and modified them for their own sector, seeking and finding standardisation, building cross-functional teams, cost certainty, repair time, productivity, defects and safety. This has led to a step change in the industry and while there is always room for improvement, it moved the property insurance industry in the UK from being reactive to proactive, at lower cost, coupled with improvements in service as recognised by the [Sir Michael] Pitt report.

It would be wrong to suggest that this transformation is anywhere near complete, but it would be equally wrong to think that Egan’s ideas fell on deaf ears.

  • Tony Boobier (F),

Last week NCE highlighted certain ongoing industry problems around efficiency, claims conflict, corruption and redundancies. There may be several reasons for these problems, but there is possibly one major common factor: that generally, there is no premium paid for excellence.

Consultants and contractors continue to operate too often as a commodity. As a result, too many contracts get awarded on a cheapest bid basis where the margins, man-hour rates, and prices are squeezed. This leads to self-defence tactics, disputes and ultimately a pre-occupation with claims.

Sufficient net income is then also not available for critical training, development of across-the-board in-depth skills, or improved designs and construction techniques.

The industry should sell economic benefit to the client based around products which identify “best value” overall benefits for any particular scheme, and yet allow for much higher margins within any bid and properly reward the more efficient and innovative.

This way efficiencies would be more easily met, the pressures for claims and conflict would reduce and better incomes and job security for the more efficient would result.

  • Peter Wilson (M),


High speed rail is the best way to get us on track

High speed rail: Better than just improving what we already have?

High speed rail: Better than just improving what we already have?

Dave Smith’s letter “Improve what we’ve got” (NCE 1 October) rather misses the point of a new high speed rail network.

Much improvement has already been made to the present rail network, resulting in the improved journeys cited.

However, further improvement will come at higher incremental cost and disruption, while not addressing issues such as increasing modal shift from internal air travel to environmentally superior rail travel.

New high speed rail tracks operate on more severe alignments and are thus more terrain friendly and cheaper than conventional rail, offer capacity through speed and allow existing routes to be used for freight, which will relieve road congestion.

  • Professor David M Johnson (F), Cumhill House, Pilton, Somerset BA4 4BG


Let’s build for a car-free society

Am I the only one who is continually disappointed by the lack of foresight that our profession in particular seems to revel in?

Some infrastructure has a life of 125 years or more, so any new investment will transcend the time when oil either runs out or ceases to be economically viable to use as fuel. This consideration should be the first test of any scheme that needs funding for the next 20 years.

We must recognise that we need to provide for a future without the car. The UK needs to build a new rail link from London to Preston with at least three tracks in each direction − express, local and freight.

Heathrow, Gatwick, Luton and Stansted must be replaced by a single airport along this new route, together with a second new airport between Birmingham and Manchester replacing their existing airports and Liverpool’s.

The government should then move itself onto the rail backbone, relocating offices, eco-towns and national medical facilities. Massive capital expenditure in the South East could be avoided and this rather small country joined up.

  • Stephen Trowbridge (M), Greystones, Front Street, Chedzoy, Bridgwater, Somerset TA7 8RE

IoW conference’s different agenda

Regarding the programme for the 20 November Isle of Wight Climate Change conference, Jonathan Essex made a valid point (NCE 8 October) in drawing attention to the apparent omission of reference to means of reducing greenhouse gas emissions now.

I have referred to the urgent need for such reduction myself − and suggested ways of achieving it − in NCE’s columns in the past.

As the man who put the conference programme together, I would defend its coverage by arguing that engineers and the public are already becoming aware that methods of urgently reducing emissions are essential to avoid catastrophic repercussions. Indeed we are legally bound as a nation to achieve an 80% reduction by 2050.

The Isle of Wight conference accepts that reducing emissions is essential. The meeting’s aims are primarily to inform engineers and the lay community about the science behind climate forecasting, and to address what engineers will have to contend with if that reduction is less than 100% successful, as would be the case if the world were not to follow Britain’s lead. School children are being invited to attend and participate in the discussion. After all, it is they who will have to deal with the mess we have created.

  • Bruce Denness, Cinxia Cottage, Ashknowle Lane, Whitwell, Isle of Wight PO38 2PP

Crossrail may not need to turn back

David Barros describes the competing interests for a turnback facility for those Crossrail services (NCE 8 October) from the east that are not presently planned to travel west of Paddington. But why turn them back at all?

At Kensal Green, the Great Western Main Line out of Paddington and the West Coast Main Line out of Euston are about 500m apart and are already (almost) connected by the West London Line.

Why not turn Crossrail back at Wembley, or Watford Junction. Come to think of it, Northampton to Southend sounds quite sensible, a bit like Bedford to Brighton and look what a success that has become.

  • David Myles, Wingerworth, Derbyshire,

Crossrail will benefit 6M

Peter Hurrell’s letter (NCE last week) is capable of being completely reversed in its conclusions.

Crossrail will directly benefit 6M people in the immediate area, who are already using overloaded existing transport systems, by giving them an alternative means of travel.

The Thames Water overflow project, meanwhile, will only give a marginal public benefit to a minority of London residents!

Both schemes are worthy and Hurrell’s conclusion that Crossrail should not be funded is quite wrong.

  • John M Roe (M),

A better solution for Bristol sewer?

The article “Under Control” (NCE 8 October) discussed the logistical challenge of placing some 5,563m³ of concrete beneath Bristol.

If you compare this to the volume of the finished tunnel, 4,606m³, it makes you wonder if there was a better solution.

Storage volumes can play a key role in flooding control. The original 3.5m by 3m excavation with enlarged passing bays would have provided more than double the amount of storage than the final solution provided and would have reduced the amount of concrete required.

I am assuming that the “second strongest rock in the UK” could have been stabilised by some means. A low flow channel could have been incorporated to overcome concerns over self cleaning velocities in a rectangular structure, something that is common in precast culverts.

  • Steven Gazeley,

‘Corruption’ is a cultural definition

Following Hugh Ferguson’s letter on corruption last week, I wish to say a word in defence of Peter Proctor, who was attempting to help us to appreciate that “corruption” is culturally defined and that not all cultures share our definition.

Legally, in the UK, things are clear enough and organisations that operate at the legal boundaries may be presumed to know that they are doing it.

“Corruption”, in its inverted commas sense, is a fiscal crime defined against a background notion of something like free capitalism, is it not? Measured against such criteria, even to consult a friend commercially, because he is a friend and not because he is either cheapest or best, must be verging on corrupt practice, although it happens all the time.

The ICE must indeed take its stance lined up behind the law, but that does not exempt us from needing to understand our own definitions, or how such things might work in cultures which operate from different ethical backgrounds.

  • Malcolm Cox (M),

Your views & opinion

NCE welcomes letters from readers. We attempt to print as many as possible, which means letters longer than 200 words are likely to be condensed.

The Editor, NCE,
1st Floor, Greater
London House,
Hampstead Road,
London NW1 7EJ

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