GRIFFITHS OUTLINES BILLIONS OF OPPORTUNITIES FOR THE CONSTRUCTION SECTOR

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1 GRIFFITHS OUTLINES BILLIONS OF OPPORTUNITIES FOR THE CONSTRUCTION SECTOR A new report published today shows how the construction industry could benefit by billions of pounds by following the principles of the Rethinking Construction programme. Launching Demonstrating Success through Rethinking Construction, DTI Minister Nigel Griffiths urged more firms in the industry to adopt the agenda behind the initiative. The report documents the progress of all 374 active and completed Rethinking Construction demonstration projects. It shows that if just one third of the industry applied the principles of Rethinking Construction to their projects: client construction costs could be reduced by 1.4 billion; the cost of accidents could be reduced by 1.2 billion; and, organisations could deliver an additional 446 million in profit. Mr Griffiths announced that the Rethinking Construction organisation would now be known by a new name Constructing Excellence. The move reflects the merging of the DTI s Construction Best Practice Programme with Rethinking Construction. He also announced the appointment of Professor Dennis Lenard as Chief Executive of the new organisation. Speaking at a reception at Lancaster House, Mr Griffiths, the Construction Minister, said:

2 Over the last four years, these projects have consistently outperformed the industry average. Organisations that regularly participate in demonstration activities have achieved more predictability on cost and time and greater productivity, as well as being almost three times safer, being more environmentally friendly, having fewer defects and achieving higher customer satisfaction. There s a clear business case for adopting the principles behind the programme. Praising the 83 billion contribution of the construction industry to the UK economy, Mr Griffiths added: This vital industry has the potential to power us past our competitors as third biggest economy in the world within a decade. I urge more firms to take up the Rethinking Construction agenda. Notes to editors: 1. Nigel Griffiths launched Demonstrating Success through Rethinking Construction at Lancaster House, St James s, London on Tuesday 8 July The report is written by Professor David Gann, chair of the National Strategy Panel for Rethinking Construction. 2. Copies of the report will be available shortly from or from Constructing Excellence, Judd Street, London WC1H 9PX, telephone ; fax Rethinking Construction is the banner under which the construction industry, its clients and the Government are working together to improve UK construction performance. Rethinking Construction partners aim to showcase innovations in both products and performance through demonstration projects and to highlight best practice within the industry.

3 4. Constructing Excellence brings together Rethinking Construction and the Construction Best Practice Programme to deliver an effective and streamlined approach to the delivery of construction industry reform and offer the industry a single port of call. It is the successor body to both these organisations and its remit is to continue implementing the Rethinking Construction initiative through a network of best practice clubs, regional cluster groups and demonstration projects. 5. Professor Dennis Lenard has held many senior positions in the Profession and Industry and was the founding director of the Centre for Construction Innovation NW. He is currently the Director of Business and Industry Development Research Programme in the Australian National Cooperative Research Centre for Construction Innovation. He is Past Chairman of the International Cost Engineering Council. The Council has 36 nations represented and focuses its activities on the construction, energy, petrochemical and gas sectors. Previous appointments include the Australian ministerial appointment to the Board of the Construction Industry Development Agency and Chair of Construction Industry Restrictive Practices Committee. His industry experience is diverse ranging from major construction to residential property development and building. He has in worked mainly in Australia in industry and academia but has gained experience in Mainland China in delivering Development and Project Management business improvement programmes to senior corporate managers and in Hong Kong in He is particularly interested in International Property Investment and Construction and has undertaken consultancies the provision of infrastructure. 6. Case studies of demonstration projects include: UNIVERSITY OF CAMBRIDGE CLIENT Capital Projects in Progress: 500 Million Cambridge University owns approximately 870million of existing buildings and has embarked on the largest building programme in the history of the University. The rolling programme of constructing 500 million of capital projects commenced on-site in 2001 with the last phase due for completion in 2006 and includes the Addenbrooke s Medical and Research Facility. The University is a Modern Client and takes a lead in initiating improvements in construction practice and committed to the implementation of the procurement principles outlined in Sir Michael Latham s Constructing the Team and Sir John Egan s Rethinking

4 Construction. The University has recently won two research contracts from the Higher Education Funding Council for England (HEFCE) for the Development of Good Management Practice. The embodied Rethinking Construction principles include, quality-led selection of contactors, risk-sharing between client and contractor, bringing contractors on to the design team at the early inception stage, and formalising commitment to continuous staff-training as part of the overall contract. The Estates Management Team is led by M4I Board Member, David Adamson. SKANSKA UK MAIN CONTRACTOR Turnover: 1.3 Billion Employees: 17, 000 Skanska UK is part of the 15 billion Skanska Group. Skanska UK, is one of the top 4 UK contracting companies and has been responsible for significant number of high-capital value construction projects including the following which are in progress:- Refurbishment of the MOD building in Whitehall, the City s Swiss Re Building (popularly known as the gherkin ), Channel Tunnel Rail Link, Queen Elizabeth Hospital PFI project, Manchester Airport Passenger Interchange and a number of PFI and design and build prisons. The company is active aboard and are responsible for building the largest liquid gas tank in Dabhol, India and New Valley Pumping Station in Egypt. International strengths include tunnelling and underground construction such as mines usually handle by Group specialist company Cementation- which forms part of Skanska UK. Skanska UK is the largest Contractor in Hong Kong. The 571-bed Queen Elizabeth Hospital is a M4I Demonstration project was PFI Health Project of the Year. WATERLOO AIR MANAGEMENT SPECIALIST CONTRACTOR Turnover: 19 Million Employees: 250

5 Innovative heating, ventilation and air conditioning product manufacturer and forms part of the family owned Hunter Group. Major projects include the Millennium Dome, Heathrow Airport Terminal 4, Sunderland FC s Stadium of Light, Jaguar Cars and Toyota Derby. The company was one of the Rethinking Construction Demonstration of Organisational Change with an exemplar approach to partnering between a product manufacture and its supply chain. This approached formed the basis of a case- study - The why, what and how of partnering the supply chain skills and behaviours which make the difference at Waterloo Air Management. The drafting and publication of this document was funded by the DTI s Partner in Innovation Programme. BENNETTS ASSOCIATES ARCHITECTS Formed in 1987 by Rab Bennetts, CBE as an architectural practice which pioneered modern sustainability principles in construction. The organisation has won 30 awards for construction, teamwork and design. Their projects include PowerGen in Coventry, University of Leicester and BT in Edinburgh. The practice is noted for the Operation Centre of Wessex Water (an M4I Demonstration Project) which was winner of both the Office and Building of the year in The Wessex Water building has also won the award for greenest commercial building in the UK. This building has the highest BREEAM rating for any commercial office in the UK and operates at 1/3 of the conventional energy consumption levels. The building process also sought to reduce transport and embodied energy, remove waste from the process and maximise recycling by incorporating recycled products and maximise biodiversity. BAA CLIENT Gatwick South Terminal International Dept Lounge Extension Construction Value: 15.7m Key Players: BAA Projects, Taylor Woodrow Construction Description This project was the extension of the International Departure Lounge Extension at Gatwick Airport South Terminal. BAA and Taylor Woodrow collaborated to develop a project website able to store documents and communicate all the latest information to the desktop of anyone who

6 needed it. Examples of information contained are photographs, project modelling, drawings, team directory, newsroom and project data. Headline Results Increased productivity. Vast reduction in printing costs. Time savings through improved drawing development, distribution and approval system. Fire Safety Maintenance Work Construction Value: 1.7m Key Players: BAA, Mitie McCartney Fire Protection, Currie and Brown Description A partnering project to maintain penetration seals and fire barriers in secondary fire compartment walls in the North and South terminals at Gatwick Airport. The contract for primary compartment walls were conventional contracts that became adversarial, suffered delays and blew the budget. For the secondary walls BAA turned to specialist MITIE McCartney who took responsibility for survey, design and construction of all secondary fire stopping. Headline Results Predictability the secondary fire stopping finished 22% early in the South Terminal and came in as predicted in the North Terminal. Defects the secondary wall works were delivered on time and were defect free at handover. Productivity value of work delivered per person was 25% better than planned in the South Terminal and 11% better in the North Terminal. Mayfield Farm Constructed Wetlands Construction Value: 16m Key Players: BAA, Laing, Penny Anderson Associates Description This project was the development of a wetland system that treats runoff from Heathrow Airport. A combination of hydraulic balancing, aeration, sub-surface gravel reed beds and floating reed beds are operated by stateof-the-art sensing and control systems and used to treat de-icants (mainly glycols). The reed beds act as a host for bacteria that breakdown the glycol and help remove metals and hydrocarbons from the runoff. The reed beds will be reassessed after 20 years to see if they need replenishing.

7 Headline Results Capital Cost BAA cut their original 30m budget by one third through prudent investment in research and development and fostering innovation. Construction time Construction programme on time. No reportable accidents.

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