Specialists hold key to boosting efficiency in infrastructure recovery

Martin Blower takes over as the new chairman of the Federation of Piling Specialists next month. As the new UK managing director of German foundation giant Bauer he is well placed to understand the challenges facing specialists in the post-recession infrastructure market.

Martin Blower FPS

Interview by Infrastructure Intelligence editor Antony Oliver.

Q: We are finally emerging from six difficult years of recession. What do you see as the biggest challenges facing the Federation and Piling Specialists (FPS) and its membership?

A: The FPS is a society of specialists so between us we retain a huge amount of experience that quite of few of the main contractors do not actually hold any more. So as a learned society and as group of contractors we have to share information and collaborate more. That means up-skilling the whole membership to work in the new environment.

Q: With the increase in activity in the market is there more opportunity for specialists to generate better margins?

A: The market is well and truly over supplied with resource and eager contractors so we don’t see any sign of improvement in margins. Certainly margins have improved since the nadir of 2008 and 2009 but the market is competitive and there are lots of hungry contractors competing tooth and claw for work.

Q: Where do you see the work coming from in the future?

A: The major work is always going to be in London and the south east – it is where nearly all the money is made in the UK. That said, we are seeing that out in the regions the government is now encouraging greater levels of infrastructure investment – including in Scotland and Wales. But commercial and private investment levels are still very low.

Q: Are we seeing smaller specialists now having a greater say in the way projects are being run or procured?

A: We now have a bigger influence on projects rather that a bigger say. We are trying to ensure that our end clients and users actually engage with us in a much more structured way than they have in the past. We have seen that with Crossrail and at the Olympics and we are seeing it with Thames Tideway. Clients are now increasingly inviting us along early and HS2 is our next opportunity to work with them as they procure their supply chains.

Q: Does the National Infrastructure Plan help you and other FPS members to plan workload?

A: It does help us as specialists and it helps the industry. But when making long terms decisions there is still a degree of uncertainty and scepticism as to whether the plan will actually be delivered. But it does allow us to make medium term decisions - we have a declared intent. But it would be unprofessional of us to assume that all of that pipeline will be achieved in the stated time line.  But yes, it does inform our decision making.

Q: Alongside the current programme of projects are large programmes of enhancements to existing infrastructure -  which do you see as most important to specialists?

A: It all really depends where you are in the market. The driven precast market for example has had an extremely hard time since the start of the recession but in the last 18 months there has been definite recovery in that market because we are building houses again. So for one part of the FPS membership housing is very important yet for others it really isn’t. So we have to be able to flex the organisation and its priorities to suit.

Q: Is it hard for smaller organisations to get messages across the government?

A: The FPS has been largely introspective over the last couple of years. But we have now put in place a process to engage with stakeholders to communicate more widely. We also plan to broaden the membership to include other specialist suppliers such as plant manufacturers, labour agencies, designers and concrete suppliers to help us to have more influence in the market. One of the fundamental steps is to have stronger voice to talk to government and to main contractors and to start to influence the people who buy from us.

Q: Is the influence of the tier 1 contractors still to great? Does it stifle innovation?

A: You see that from as far back as the Egan report in 1998 that early involvement of the specialist contractor and working together more collaboratively helps. But while we have seen many steps along that path the recession has returned us to hard competitive tendering. On the other hand it has also facilitated the Egan principles as people now realise that they haven’t got the budget so  have to do things more cleverly. That is one of the drivers for Building Information Modelling of course – a way to concentrate on value not just cost.

Q: What has the recession taught the foundation industry?

A: To be more collaborative and open with ideas. We do best being transparent and working together to win from all sides. 

Q: You take over as chairman of the FPS in May for the next two years. What do you want to achive in this time? 

A: My personal objective is to continue the collaborative and open way that we deal with each other and to drive up standards. I also want to see the success of the new associate membership scheme and so become more influential as an organisation.

Q: Meanwhile you are six months into a new role at Bauer. What are your priorities there? 

A: To establish a long term successful market presence in the UK. In the last few years we have had a turnover of around £20M a year built largely on capital projects. Our intension is to concentrate on these large capital projects where we can make a difference but also to have a robust market share. Not to be the biggest contractor in the UK but to have an established and strong position in the UK that reliably makes money.

Q: Working for a major German firm, how is the UK doing in comparison to the rest of the Europe.

A: I have just been to a European managing directors meeting with Bauer and I was struck by how we all shared the same issues – clients that don’t pay, projects that are delayed, contracting difficulties and the same skill shortages.  

Q: Is now a good time to be in the foundations industry?

A: We see that we have come through the worst and that there are real signs of opportunity in the industry now. But you have to temper that with the reality that recessions come and go. Infrastructure is top of minds and so that it good for the industry.

If you would like to contact Antony Oliver about this, or any other story, please email antony.oliver@infrastructure-intelligence.com.