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Games get a timely lift

The Olympics at last seem to be gaining some momentum.

Only recently the Olympics project seemed to be struggling with lack of interest and potentially damaging workforce issues. But big players are moving in for key jobs and the unions are happy with an agreement for direct labour.

A week ago, the Olympic Delivery Authority unveiled the names of half a dozen companies that will tender for the chance to build the Olympic velodrome.

After all the criticism the ODA has taken about no one bothering to bid for high-profile contracts, it is an impressive line-up of companies. There is an element of surprise, too, with Alfred McAlpine’s name appearing on the shortlist.

The ODA is privately pleased with the names it has attracted for one of the showpiece venues – one of the ‘Big Four’, as it has dubbed them. It will have been further encouraged by the noises coming out of two of the bidders on the velodrome shortlist.

At Carillion’s recent interim results presentation, its finance director mentioned the ‘O’ word before he was asked about it – something of a first. Richard Adam said the job was a key opportunity in the UK – although he did add the rider that the company was bidding “selectively” for around £300 million of Olympics work.

Risky business

Not too many contractors have been keen to tell the City they are involved in the 2012 Games – it’s seen as high-profile and too risky – but the chief executive of building and fit-out contractor ISG, David Lawther, said he would consider more 2012 work if it was successful with its bid for the velodrome contract.

Mr Lawther said: “We want to issue our velodrome tender by November before looking at making a move on more 2012 projects. If we’re successful with the -velodrome, we will look at pursuing other venues.”

The comments made by Mr Adam and Mr Lawther will be encouraging to ODA chief executive David Higgins and his team, especially in the wake of the problems it had in finding bidders for the main stadium and the furore over the aquatic centre. That eventually produced a three-strong shortlist but even then there were murmurings that one of them, Balfour Beatty, had had to be strong-armed into bidding.

Whether that was true or not – the ODA denied it – there was undeniably a feeling that the first two key contracts on the site had not got off to great starts.

There were plenty of bidders for the first infrastructure jobs but it is the high-profile deals that will always catch the eye and act as an initial weather vane.

Industry showcase

But building work is just one part of the 2012 Games. For some, they are a chance at redemption, a chance to show a public made cynical by the carryings-on at Wembley Stadium that the industry can build showpiece projects on time and to budget.

Many are looking at the Games as a blueprint for how the construction industry will operate in the future.

For example, the ODA wants 50 per cent of all -materials transported to the site by means other than road to meet sustainability and green targets. Rail will feature heavily but as the site is surrounded by -waterways, barges and boats will also be used.

This has recently seen Hanson use what are basically giant plastic buckets in a series of trials around the Stratford site. ODA chiefs reckon they can save 1,000 lorry journeys a week using river transport when construction work begins in earnest by the middle of next year on the aquatics centre and the main stadium.

Another materials company, Knauf Drywall, carried out a trial run in March to see whether plasterboard would be damaged by ferrying it by barge from its site in Sittingbourne, Kent.

The entire way the Games is delivered – from -procurement strategy to sustainability, to new ways of working and the methods used to get materials to site – is planned to be a benchmark for years to come.

Union relations

The same goes for industrial relations. Around 1,000 workers are on site already and this will shoot up to 9,000 in three years’ time.

Last week, the ODA said it had signed a memorandum of agreement with the main construction unions on the site, Unite, Ucatt and the GMB.

The deal had actually been pretty much signed off a couple of weeks ago, and back in August Bob Blackman, national construction secretary at Unite, said: “We believe we’re going to get a directly employed workforce.”

This has been a Holy Grail for the unions ever since London was announced as host for the Games in the summer of 2005. Their argument has been that if the -industry is really serious about making it a career choice, then the benefits most people in other industries take for granted should apply in this one.

These include holiday pay, sick pay – basic rights, essentially – for those who will build the Olympic Park. Some are unhappy with the idea of a directly employed workforce and argue that it will add millions to the construction bill.

The unions have talked about the lasting legacy of the Games. Mr Blackman said: “We want the thousands of workers who build and deliver the Games to be safe, well treated, properly rewarded and their unions fully involved.”

Fair deal

Five key principles have been included in the agreement with perhaps the most important being: “Encouragement by the ODA to contractors to commit to the ethos of a directly employed workforce.”

One source said: “The ODA have said they are absolutely committed to a properly employed workforce. They originally only said ‘where reasonably practical’.”

Earlier this summer, any such deal seemed a long way off with unions talking gloomily about the chances of one being hammered out. Talks at one stage required the intervention of ODA chief executive David Higgins, and the agreement announced last week had to be redrafted in a form that everybody could sign.

The source added: “There were a number of things going on behind the scenes as you would expect. Someone was asked to come up with an agreement that everybody signed.

“We do expect it to be a benchmark for the future and we think it is going to be beneficial to everybody. Our members will be employed properly like everybody else in the UK.”

Unions will monitor the amount of direct labour on the job and will flag up any concerns at an employment committee attended by employers and unions.

Mr Higgins has made the right noises as far as the unions are concerned. He said: “We want to build on employee relations best practice and demonstrate what the construction industry and its workforce can achieve.”

The idea of direct labour might be difficult for some contractors to stomach but if the industry is serious about making it a career of choice – and many in it keep saying they are – then it is a step in the right direction. This deal is not just about warding off the threat of strikes.

Wembly legacy

The experiences of Wembley Stadium are a bit of a red herring when the issue of labour relations comes up. Then, around 300 steel workers picketed the project in the summer of 2004 after being thrown off the job while Multiplex and Cleveland Bridge battled it out.

The job certainly was not beset by the sort of strife that afflicted the Jubilee Line Extension when it was hit by walkouts, sabotage and, at one stage, seeming unending general chaos.

Wembley was different because it was not time sensitive with an immovable deadline. The JLE was and so are the Olympics. But the Olympics has a different feel to the JLE. Holding a national project like this to ransom would not make great headlines for the unions.

But last week’s agreement is not really about averting JLE-style disasters. It is an example of how a project of this size – the ODA has overnight become arguably the most important construction client in the land – can do the right things in all sorts of ways.

There’s been a lot written about the Olympic Games being a showcase for the country. But for the industry, agreements like these are hugely important if construction is to ever shake off a reputation that, basically, it does not care that much for those who work in it.