Some of the UK’s largest construction firms will come together in ‘Team UK’ joint ventures to bid for billions of pounds of construction contracts across the globe, under new government plans.
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The Department for International Trade has unveiled plans for a partnership between the government and construction companies to create a more joined-up approach to target overseas contracts and boost the UK’s share of the global market.
The Infrastructure Exports: UK partnership, launched this week, will see some of the country’s largest contractors, consultants, clients and suppliers come together to identify bidding opportunities across the globe and form joint ventures best placed to bid for and win these contracts.
The group will be co-chaired by minister for international trade Greg Hands (pictured, left) and Wates chairman James Wates (pictured, right), and include representatives from 17 firms and organisations including Carillion, JCB, Mace and Mott MacDonald (see box).
Members will meet three times a year to identify projects to bid for and the identity of the best-placed bid team. The first meeting will take place this month.
Global annual investment in construction is expected to grow 80 per cent to $15.5tn (£12tn) by 2030, according to Mr Hands.
Mr Hands said the new approach will ensure the UK is in prime position to take advantage of this growth. Research shows overseas clients award their biggest contracts to consortiums rather than single bidders.
Mr Hands said: “Our ‘Team UK’ approach will bring together leading UK infrastructure companies to showcase their expertise on a global scale and work together to successfully bid for the biggest contracts.”
“Those around the table must not forget about the other 99 per cent of the industry” – Editor’s comment
Mr Wates said: “British architects and engineers have done a good job of winning individual projects, but other countries are forming teams and winning work with an average value of $1.5bn in consortia, compared to just $1.1bn through traditional project procurement structures.
“It would be madness for us not to learn from our competitors.”
The move comes just over a year after prime minister Theresa May created the Department for International Trade, following the UK’s decision to leave the European Union, to improve UK companies’ ability to export to non-EU markets.
Andrew McNaughton, IE:UK member and chief operating officer at engineering giant Systra, confirmed that IE:UK would be looking in large part at projects outside mainland Europe.
Mr McNaughton, who is also one of the prime minister’s business ambassadors for infrastructure, told CN: “You probably couldn’t be as definitive as saying this move is a direct result of Brexit, but it is no doubt a consequence.
“There are a lot of opportunities out there that we haven’t been capitalising on, and this is borne out of the larger desire to capitalise better on British business to export.”
UK government offices across the world will supply the Department for International Trade with pipelines of opportunities. These will then be fed back to the IE:UK members, who will decide on which projects to pursue.
Part of IE:UK’s role will be to engage with international clients before any tender documents are released to better understand what these clients are looking for from bidders.
Mr McNaughton said: “Often in the past, the UK government has said there is a fantastic project over here, why isn’t the industry going and doing it; there are some real reasons for why it isn’t being done.”
Sir John Armitt told CN that financial support would be a crucial part of how the government would support the new partnership. “One key thing would be for the government to support export credits,” he said.
“Providing guarantees could be the most tangible way the government can support [UK companies abroad] as well as bilateral agreements with other governments.”
While the initial list of members is made up of 17 construction organisations, members suggested this was not a definitive list and that the aim of the new partnership was to open up the export market to the wider UK supply chain.
Crossrail chairman and IE:UK member Sir Terry Morgan said: “We have these fantastic tier twos and threes on Crossrail with very little awareness of how to export their expertise. We’ve always been good at the front-end professional services; now it’s about adding extra value and reaching further into the supply chain.”
In March, Mr Hands led a delegation of 15 UK firms to Argentina and Brazil where $12bn is being invested in infrastructure projects in the region.
The group will also work with the UK’s export credit agency, UKEF, to access financing so that UK firms can secure major contracts, such as Carillion’s £490m deal to deliver parts of the Expo 2020 Dubai Park.
The 19 members of IE:UK will be:
- Co-chair, Greg Hands, minister, Department for International Trade
- Co-chair, James Wates, chairman, Wates Group
- Sir John Armitt, chairman, City and Guilds Group
- Martin Bellamy, executive director, Bam Nuttall
- Philip Bouverat, director, JCB
- Shaun Carter, group development and strategy director, Carillion
- Graham Cartledge, chairman, Benoy
- Peter Chamley, global infrastructure lead, Arup
- Brian Gallagher, CEO, infrastructure, Department for International Trade
- Mark Holmes, chief operating officer of consultancy, Mace
- Andrew McNaughton, chief operating officer, Systra
- Sir Terry Morgan, chairman, Crossrail
- Freddie Patterson, business development director, Lagan Construction Group
- Dean Purvis, director, infrastructure, Turner & Townsend
- Nick Roberts, chief executive officer, UK & Europe, Atkins
- Stuart Senior, main board, Gleeds
- Tracey Smith, chief executive, British Expertise International
- James Stewart, chairman, global infrastructure, KPMG
- Gordon Turley, major projects director, Mott MacDonald