Boom and bust cycles make it hard to plan for the future, says Balfour Beatty’s rail boss

The man in charge of steering Balfour Beatty’s rail division says he believes the company will look to take on more smaller projects rather than mega ones in the coming years as 

Mark Bullock, Balfour Beatty’s chief executive officer for Rail and Utilities, says the organisation is “in a good place” despite expected changes in the mix of business and believes the firm will carry on picking up work after a good successful run already this year.

Bullock was speaking to Infrastructure Intelligence at the launch of the Balfour Beatty’s Rail Innovation Centre which aims to bring together the firm’s expertise in systems engineering, computer science, robotics, data analytics, electronics and electrical and mechanical engineering. Combined with the York and Matlock offices, the firm will employ more than 150 leading technicians, engineers, data scientists and developers.

The rail boss believes facilities like the one they have opened in Derby are extremely important in the shift towards a digital transformation which will in turn create a more reliable, cost efficient and safe railway network for all users across the UK and overseas.

“For a long time, it’s been our intent to grow the digital side of our business and we are really proud of the innovation centre and think it’s quite special in terms of what it does,” Bullock added. “But the move was more a practical issue than just a statement of intent because of the facilities we already had and the work we were doing.”

Bullock says the organisation has “a really broad offering” and the centre is just one illustration on the breadth of work they carry out in the rail market. “We have a really long legacy and that history brings us a really broad capability right from concept design, construction, maintenance and operation of the asset and everything between with technology just being one aspect,” he added. “So, what we have done is develop the experience of the railway form working on it and applied technology to that to expand to what we have become today.”

The new innovation hub is home to the latest developments in measurement systems, ‘predict and prevent’ technology, signalling and data science. Products and software being used at the facility include TrueTrak, OmniVision, OmniSurveyor3D, OmniCapture3D, DataMap and AssetView. 

Some of those working on the latest cutting-edge technology are graduates just starting out in their careers. Bullock believes not only does Balfour Beatty have a moral obligation to society to create meaningful career opportunities for graduates but it also makes “good business sense” by hiring people who can generate good value for clients. 

He said: “We have some great young people within this business that do amazing things and are being given the opportunity to undertake some really innovative stuff that has never been done before. From a business point of view the skills shortage is definitely an issue for the UK and construction as a whole.”

"One of the problems we face in regulated markets where you have this five to eight year cycle of regulatory settlements and planning is that it creates this boom and bust cycle."
Mark Bullock, Balfour Beatty's chief executive of rail and utilities.

The chief executive claims that ensuring opportunities for those entering the industry is not made easier by the “boom and bust cycles” within regulated markets like rail.

“One of the problems we face in regulated markets where you have this five to eight year cycle of regulatory settlements and planning is that it creates this boom and bust cycle. You have loads of work then you have no work so it makes it really difficult for organisations like us to plan for peoples’ futures and invest in training because if we don’t have an order coming in then we are unable to keep people busy so that is an issue within the regulated markets but there definitely is not a lack of desire to get new people in the door.”

Looking forward to CP6, where the new model of spending will see enhancements assessed on a project by project basis and less visibility in the construction pipeline, Bullock expects a change in the mix of business they do with less focus on mega projects and more emphasis place on smaller projects during the next cycle.

But the rail boss is confident on picking up new contracts this year and beyond thanks to the reputation that the organisation has built up over an extended period. 

“I think we are in a good place, we have had a good successful run of contract wins this years,” Bullock said. “We are really busy within our tendering department, we are actually recruiting people within the department because we are so busy. I think we have more than a good chance of picking up more work and while clients always have choices, I think we have established a well-deserved reputation of being a reliable contractor that does what they say they will do with a high degree of competence and skill. As long as we keep doing that then I would expect us to carry on picking up work.”