British construction has developed its response to its failure to compete with international majors like Bechtel, Vinci, Skanska and Bouyges – its solution is state-sponsored collusion.
IE:UK is co-chaired by trade minister Greg Hands, and Wates Group chairman James Wates. Wates is not generally noted as a powerhouse of international contracting but it did set up Wates Construction International LLC in Abu Dhabi in 2009.
Also involved in the initiative are Carillion, Mace and Lagan Construction, which have rather more international experience, as well as digger maker JCB and consultants such as Arup and Mott MacDonald who all have substantial global reach.
It is unclear to what extent consulting engineers like Arup and Mott MacDonald can help win work for British contractors overseas, however, without jeopardising their much prized independence and probity.
IE:UK will meet three times a year to choose which projects it, as an organisation, wants to pursue with government support. It will then decide which contractors will form a consortium to bid for Britain.
The UK government has always offered assistance to UK contractors bidding overseas, opening doors and providing export credit guarantees. The key difference now is that a minister will co-chair meetings to decide who bids for what. It is likely that minutes of these meetings will have to be made available for public scrutiny, even if the press is not invited to observe.
Presumably contractors outside of IE:UK, such as like Laing O'Rourke, Costain and Balfour Beatty, will still be perfectly free to submit their own bids in fair and transparent competition against Team UK. The full legal ramifications are likely to emerge only after anyone submits a challenge, if they ever do.
IE:UK appears to be a direct response to the hefty Merge or Die report by Greg Malpass, produced in January 2017.
Greg Malpass, an independent mergers & acquisitions analyst who used to be a corporate development executive at Taylor Woodrow, Tarmac and Wimpey, produced a 360-page analysis explaining how British contractors were too small to compete internationally. However, his solution was for majors to merge, not just form more joint ventures.
James Wates said of the new initiative: “This is a timely, fresh and strategic approach. The UK has a wealth of expertise in developing major infrastructure projects. This is a great opportunity for business to work together, alongside the government, to target overseas projects, as many countries around the world plan to develop their physical infrastructure to support their own economic growth.”
Trade minister Greg Hands said: “Global infrastructure investment is set to increase rapidly in the coming years and we must make sure UK firms are in prime position to take advantage of it. 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.”
The Department for International Trade has always offered a leads service to UK industry, using a network of staff posted in embassies and high commissions around the world. However, British contractors have not always been particularly interested. IE:UK hopes to change that.
The members of IE:UK are:
Source: Construction Index