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Watch out, the Spanish are coming

Roads - BAA buyer Ferrovial has already become one of Ireland's largest roads contractors from a standing start four years ago.Diarmaid Fleming went to see a Spanish conquest in action.

Four years ago, Spanish construction giant Ferrovial had no Irish presence.

Within 12 months of setting up with a team of three it won the largest highway project ever let by the Irish government.

The project is the d360M (£247M) M4/M6 KilcockKinnegad upgrade, won in joint venture with Irish contractor SIAC in early 2003.

Since then, it has added the second biggest roads contract - the M3 Clonee-Kells motorway, Contract 1 on the Dublin's orbital M50 upgrade scheme. It is also working on the N1-A1 DundalkNewry cross-border project. An impressive 0 to £684M in under four years.

The Spanish run a tight ship with a young crew. Ignacio Clopes, managing director of Ferrovial's UK and Ireland construction operation Ferrovial Agroman, is at the helm in his office in Dublin.

'The three of us who were here at the start are still here, ' says Clopes, who leads a team of 50 Spanish staff in Ireland.

'We have a young team, the average age is 29. I'm the oldest at 40, ' he adds.

The secret behind Ferrovial's rapid success is a near-forensic approach to seizing opportunity, combined with hard graft in a tough industry.

The Irish government invited foreign companies to augment the local industry and take on larger contracts, when it announced its £13.6bn National Development Plan (NDP) in 1999.

Ireland soon came up on the Ferrovial radar, as the company has been pursuing a rapid overseas expansion programme for some time.

In 1997, Ferrovial's earnings from overseas work was practically zero. Last year, around 46% of operating prots came from outside Spain.

But going it alone is not part of the Ferrovial way of coming to a new market.

'When we arrive in a country, we try to find a local company we can do business with. This is a key element of our strategy, ' says Ireland contracts manager Pedro Martinez Artigas.

'We came on regular visits, and spoke to 'maybe' companies looking at synergies. We look for a mutual understanding from the beginning, to see they share some of our ideas and that there's chemistry, ' says the third of the three amigos, Augusto Pablo Rebollo.

SIAC, Ireland's longest established roads contractor (although now a diverse business) was seen as the perfect match.

Martinez says that building up trust when you are new to the market takes time, but is essential to doing business.

This the Spanish rm may have to repeat on a much larger scale at BAA after Ferrovial's agreed takeover goes through.

'It's hard work, long hours and you have to develop relationships with local authorities, designers and suppliers to be successful once you are operating. It's not easy at the start, building up local trust, ' says Martinez.

Cultural differences take longer to overcome - and sometimes just have to be accepted.

'You have to adapt, knowing there'll be a lot of cultural differences. You can't do everything to your rules - or everything to your partner's rules either, ' adds Rebollo.

One 'cultural' difference of the team noticed was the role of engineers on Irish sites.

'Here in Ireland, you can find very experienced engineers out on site and quantity surveyors inside the ofce, managing the job commercially and contractually.

'In Spain, when you get experience as an engineer, you control all aspects of the site and contract, ' says Rebollo. Not surprisingly, the top trio are all engineers.

Ferrovial might also like to claim as a cultural feature a near ruthless commitment to deliver to deadline and budget.

The 39km M4/M6 contract won by Ferrovial in March 2003 opened last December, 10 months early and within budget.

This was the first Public Private Partnership roads contract let in the Republic, and Irish firms simply could not match Ferrovial's international experience.

'It's not luck, they knew what they were doing, ' says one local contractor.

'They bring a huge financial resource, so they could take the risk of working on new forms of contract which we could not. But the SIAC link is crucial too - SIAC know how work is done here.

'In Spain, once a job is approved, it goes ahead and the contractor steams ahead. Here, it's not the same, with planning objections or legal action from environmentalists - and these differences can be difficult to understand for someone coming from a different culture, ' he says.

There is an evangelical zeal about the team, perhaps explained by its approach to overseas postings. All its key Spanish staff in Ireland have relocated there with their families.

'We like people to move to a country with their families - it is not good to be working on your own. And you have to live in the country to get the full experience, ' says Clopes.

What results is almost a Ferrovial colony.

Problems can be chewed over at breakfast, lunch and tea, the team's esprit de corps forged through shared experience and time together.

Late in the evening in the site offices in County Meath, the only voices are Spanish.

Other cultural features are not imported from Spain.

'There is no siesta here, no ma±ana. Here we lunch the Irish way, half an hour at our desks, ' adds Clopes. But how they see themselves, and perhaps their zeal, is linked to their national identity.

'The Spanish character is very aggressive - 'ambitious, ' corrects Rebollo - and this is good when it's applied in the right way.

And the Irish view: 'These are tough cookies, but fair and the kind of people contractors would like to work with, ' says one contracting source.

Clopes, who heads up the UK construction business too, says the Irish experience will be invaluable across the water.

'The local issues in the UK industry are probably not that different from here in Ireland, and our experience will probably not be that much different from Canada, United States or Ireland, ' he adds.

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