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Multiplex's new dawn

AGENDA

Now the row over Wembley Stadium with Cleveland Bridge is finally settled, Multiplex is hoping its reputation in the UK will start to recover, writes David Rogers

SUDDENLY there is light at the end of the tunnel.

Multiplex here and at its headquarters in Australia can sense that after months and months of terrible publicity things at last might start to go its way.

There is still only one project that matters for Multiplex right now - and it's in north London.

Some time this month the pitch at Wembley will be laid - the most visible sign yet that construction is coming to an end. The firm plans to be off the job by the middle of next month.

Away from the site, Multiplex scored a hugely important victory last week over its former steel work firm, Cleveland Bridge, at the High Court.

Admittedly the judge, Mr Justice Jackson, said there was no outright winner in the case, but the reality is that Multiplex took the spoils. It won the two main points in the case - the ones it and CBUK wanted to win - and CBUK now faces having to hand over around £20 million to its nemesis.

Throughout the whole of May, the pair traded blows on an hourly basis in the cramped surrounds of court number seven at the Technology & Construction Court in London.

To anyone who was there, it was clear that the pair didn't have much time for each other. The judge listened to a lot of mud-slinging.

In fact, such was the animosity - when giving his verdict the judge said that during CBUK's time on site the background was one of 'mutual recrimination and ill will' - anyone would think Multiplex and CBUK actually did quite well to get any steel lifted at Wembley at all.

There was an almost daily running battle between the pair. In court the animosity was best summed up by the evidence of CBUK chief executive Roddy Grant.

Getting more and more annoyed with Multiplex's QC, he said of Roger Stewart's client: 'They spent most of the time trying to screw their main subcontractor and put us into liquidation.'

Well, according to the judge, they didn't. Mr Justice Jackson agreed with Multiplex that the now notorious 'Armageddon' plan was not in fact an attempt to bust CBUK. He said: 'It was not an outcome Multiplex was positively seeking to achieve.'

Instead, Armageddon was, Multiplex argued and the judge eventually agreed, a codename given to a strategy of what to do if CBUK went bust.

And what became clear as the trial wore on was the precarious state of CBUK's finances. Brian Rogan, now the boss of CBUK, told Ashley Muldoon, his opposite number at Multiplex in January 2004, that his firm was 'weeks' away from folding. Multiplex said it would have been folly not to have lined up an alternative steel contractor.

Multiplex hasn't been an easy company to like. It knows that itself and this is something UK boss Martin Tidd, 18 months into the job, is keen to put right.

He wants no crowing about last week's result, which saw the judge announce that CBUK acted unlawfully when it quit the site in August 2004.

He said: 'We have had a bit of a kicking and the perception of Multiplex has made subcontractors wary of getting into bed with us.

'But the truth has come out. It's regrettable we had to get to this point but we need to show humility. This enables us to draw a close to this particular chapter. This was an issue with CBUK and it's not our style to pursue all other trade contractors.'

There is a sense that in this case at least, Multiplex wants to move on. It has other bigger battles to fight.

Of CBUK, Mr Tidd has talked of reaching 'a sensible commercial settlement so we can both get on with our lives'. But in case they can't, another sapping four-week trial to thrash out costs awaits next January.

Multiplex has suffered a lot at Wembley. Financially at least it has to wear catastrophic losses that even with the money due from CBUK are only slightly less catastrophic.

To stack £200 million on one single job is going some but it is the damage to Multiplex's reputation that has hurt it the most. To the public at large, the company will always be the one that failed to build Wembley on time.

They don't really care how much money the firm has lost or whether the boss of CBUK reckoned it tried to put his firm out of business.

Whether it can repair its perception with the public at large - and as a builder Multiplex is unique for having a public profile - is another matter. But what matters to Multiplex most is its reputation in the industry - and as Mr Tidd admits this has not been great.

Over the summer of 2004 when CBUK left the site, and in the latter part of that year and early 2005 when it became clear it was going to court with CBUK, Multiplex's stock within the industry plummeted.

The revelations earlier this year of the Armageddon plan and an equally notorious email - the one suggesting CBUK be 'fixed and fucked' later - sent by its senior director in the UK at the time of the dispute cemented Multiplex's hardman reputation.

But last week maybe was a turning point. Mr Tidd said: 'It clears the decks and we are no longer in any dispute with any trade contractors in the UK.

'People hopefully can see us in a different light because there has been a perception about us, fuelled by CBUK and our rivals. We're not bad blokes to work with and hopefully this will accelerate our acceptance into the UK industry.'

That last comment is interesting given that Mr Tidd is an Englishman working in London - but for an Australian firm. There is no doubt that Multiplex has seen itself as an outsider but much of this has been largely self-inflicted.

When it first began work at Wembley, the company may as well have been rebuilding a tram shed in Wigan rather than the home of English football, such was its attitude to public relations. It seemed to not realise what it was actually rebuilding.

It then belatedly grasped the idea that it had to install a local management team in the UK and not send in more top brass from Australia. This was done at the end of 2004 when Mr Tidd was appointed. Until then, the impression was of the Aussies ruling the roost from afar - difficult to do given the vast distance between London and Sydney.

The firm is planning to finally hand over Wembley at the end of September. The summer months, it says, will be spent sorting out snagging issues and testing systems before handing over the keys to the stadium to its client, Wembley National Stadium Limited, a subsidiary of the Football Association.

It is bound to be an odd farewell. Multiplex has told the Australian stock exchange it believes it is entitled to money from WNSL and Mr Tidd says he is hoping to reach a negotiated settlement with the company.

Privately, Multiplex is hoping to squeeze £80 million out of WNSL, a figure that has already been scoffed at by its chief executive, Michael Cunnah, who said it doesn't even owe the firm a pound.

And Mr Tidd confirmed to Construction News last week that it will be chasing stadium consultant Mott Stadium Consortium for money as well.

At the start of his verdict, the judge said last week: 'The design was incomplete and Mott were late in issuing information.'

Throughout the course of the CBUK trial, both WNSL and MSC had representatives from law firms taking notes. Despite Multiplex's hope for negotiated settlements, legal action is surely on the horizon.

These are battles for another day and in some ways are less emotive than the one just run. The majority of subbies who have followed the case have naturally enough been on CBUK's side but there has been a growing feeling that it ended pulling a fast one to get off a job that was losing it money hand over f ist.

One boss said this week: 'CBUK might have had a legitimate grievance against Multiplex but they were the ones who walked off site. They got it wrong.'

Mr Tidd has talked off a turning point and the result is a morale boost for the company, no doubt about that.

One day it might even be possible to talk about Multiplex without having to mention you know what.

Multiplex chief executive Andrew Roberts has seen his firm's share price take a roller-coaster ride over the past six months. But he and the rest of the firm's senior managers are now hoping that, after last week's High Court victory, the sun will come up on a new era for the company's UK fortunes

AUS$3.08 DECEMBER 21, 2005 Company first warns it might not be able to complete Wembley stadium in time for the May 13 FA Cup Final. Mult iplex warns of 'significant additional costs' if this were to happen

AUS$3.10 FEBRUARY 21/23, 2006 FA announces that Cup Final is being switched to the Millennium Stadium in Cardiff. Two days later Multiplex announces that losses on Wembley now stand at £183 million

AUS$2 .91 APRIL 12 Multiplex says it expects to breach banking covenants as a result of supporting its construction business

AUS$3.06 MAY 18 Announces rationalisation of its UK development operations. Analysts say disposals are to help fund losses arising from Wembley

AUS$3.42 JUNE 5 Wins High Court action against former Wembley steel subcontractor Cleveland Bridge. Firm expects to get back £20 million as a result