As Sir Robert McAlpine and Vinci become the latest large contractors to report pressure on their construction businesses, it is depressing to hear of yet more delays to major projects being procured by central government.
This week, Construction News reveals that the procurement – and, of course, eventual construction – of both the Royal Liverpool and Papworth hospitals are to be delayed still further.
For the contractors involved in bidding, this is incredibly frustrating. They have spent time and money on bids that grow more and more out of date the longer the process gets dragged out.
In the meantime, the costs of staying in the race mount up, uncertainty grows and resources that have been devoted to the process could have been deployed elsewhere.
In the case of Royal Liverpool hospital, the delay is not the result of a one-off strategic decision, or even a practical assessment of a realistic timescale; it’s the culmination of a series of false dawns on when the contractor will be selected, caused by the time it is taking the government to sign off the business case.
‘It’ll be this date’, ‘No, sorry, it’ll now be this date’, ‘Oh, actually, it will now be this date’. The hospital has now been four years in procurement.
Behaviour like this makes a mockery of the government’s insistence that contractors make efficiency savings. Not because it’s not necessary, but because as clients, they are directly creating the circumstances that make it less likely – even impossible.
The result? Contractors rule out bidding for government projects in the UK and look to spend their time and money overseas. If it only takes six months to bid to build a hospital in Canada, why would you do so here?
Ultimately it’s the country that loses out. Not only does the public not get hospitals/schools/defence projects on time, but the unique economic boost and job creation that the construction industry could provide fails to materialise.
In response to an industry understandably disappointed with last month’s Budget, in which hoped-for additional investment in infrastructure was put off until 2015, George Osborne told Construction News that he was going to end the ‘feast to famine’ approach to infrastructure development.
This kind of certainty would be most welcome, even if we do have to wait. But current government procurement of health, education and defence undermines confidence.
Is the UK open for business or not?