LONDON (Thomson Financial) - The British construction industry has shown a
"meek response" towards bidding for London 2012 Olympics projects which in turn
could lead to a failure to achieve best value for money on the games, a group of
British MPs said Wednesday.
The all-party Business and Enterprise select committee said it was concerned
about the lack of enthusiasm from the sector after the main stadium and aquatic
centre projects emerged with just one bidder each.
In a report, the committee said the 2012 games "represent a massive
challenge for the construction industry".
"The scale of the programme is twice that of Heathrow's recently opened
Terminal 5, but must be delivered in half the time. It will use between 12
percent and 14 percent of the sectors capacity in the South East and London over
the next four years, with around 9,000 workers on site at its peak," the
committee noted.
Sir Robert McAlpine Ltd has been named as preferred bidder for the athletics
stadium, while Balfour Beatty PLC is building the aquatic centre.
The committee said the main reason for the lack of competition to build the
athletics stadium "appears to have been that the strength of the bid from the
winning team put off other bidders".
"It includes Sir Robert McAlpine, which was involved in delivering the
(Arsenal football club) Emirates stadium -- widely seen as a highly successful
construction project," the committee said.
It added that there were three companies involved at the start of the
bidding process for the aquatics centre, but two dropped out, leaving only
Balfour Beatty.
"The Olympic Delivery Authority may be confident it has achieved reasonable
value, but the low number of bids for the two most prominent parts of the
Olympic programme shows a rather meek response from the industry," the MPs said.
The committee also called on the government to create a new post of "Chief
Construction Officer" to tackle what it described as "fragmentation of
construction policy and procurement across government".
"Acting at a senior level as 'champion' of the sector, the postholder would
provide a single point of engagement between the industry and the public sector,
having operational involvement in policy and regulatory matters across
departments," the committee recommended.
Its chairman, Peter Luff, said despite the current building downturn the
industry "still generates more than 100 billion pounds of value-added for the UK
economy -- more than twice that of the energy, automotive and aerospace sectors
combined".
"The public sector is by far its largest client and can drive change across
the industry. We need to take action to address the issues identified in this
report, irrespective of the business climate in which the industry is
operating," Luff said.
"We agree with the industry that coordination on policy between the many
government departments that engage with and impact upon this vital industry is
patchy and ineffective."
TFN.newsdesk@thomson.com
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