Big names lose out on BSF work worth £5.7bn

Grant Prior 14 years ago

Contractors have already lost out on more than £5.7bn worth of school building work after the BSF construction programme was decimated.

Research by Reuters shows that Balfour Beatty, Laing O’Rourke, Bam, Interserve and Bouygues are among the hardest hit.

A survey of the 26 local authorities worst hit by a decision to freeze the last government’s £55bn BSF scheme, shows contracts for dozens of schools had already been awarded or were close to being signed with preferred bidders when the shutters came down.

“I’ve got one school where we’ve got mobile classrooms with rain coming through,” said Quintin Peppiatt, a councillor for the London Borough of Newham which had already spent £3m preparing its BSF programme.

“The diggers were almost in place. They were literally going to go on site in a few weeks’ time,” Peppiatt said of a £235m contract awarded to O’Rourke and IT group RM.

Reuters said Balfour Beatty is most exposed having been among the contractors to win, be shortlisted for or achieve preferred bidder status on projects worth £1.1bn or about one fifth of the £5.7bn total shown in the survey.

O’Rourke had been involved in £903m worth of projects either alone or in partnership with other contractors, followed by Interserve on £718m, BAM at £702m and Bouyges with £653m.

“There’s no doubt if you had your schools stopped, there isn’t a way of interpreting that as good news,” a spokesman for BAM said. Balfour said BSF represented 2% of revenue and it had not included unsigned contracts in its order book.

Interserve is hopeful, however, that money can still be made from work on schools, even if on a more limited scale.

“It’s obviously work that we won’t have that we thought we would have,” said Giles Scott, head of communications at Interserve. “There is a likelihood that if we don’t do any rebuilds, there will be refurbishment to the existing stock.”

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