The Construction Workers Compensation Scheme (TCWCS) has launched a publicity drive in Scotland to find blacklist victims eligible for compensation.

But unions are saying that blacklisted workers are better advised to join the ongoing legal action rather than accept a pay-off.

TCWCS has issued a call north of the border to all those worked in construction anytime up to 2009 inviting them to contact the scheme’s administrators to find out whether they are entitled to financial compensation.

The scheme was launched on 4^th July (see previous report here) to pay compensation to those who suffered financially from being on the illegal construction industry blacklist run by the Consulting Association until it was closed down in 2009 after a raid by the Information Commissioner for breaching data protection legislation. Most major contractors used and contributed to the blacklist.

Eight of them – Balfour Beatty, Carillion, Costain, Kier, Laing O’Rourke, Sir Robert McAlpine, Skanska UK and Vinci – have admitted culpability and are offering compensation of between £4,000 and £100,000 to blacklisted workers.

The Consulting Association held the names of around 3,000 workers. According to figures published by the GMB union, there may be 574 people in Scotland who are eligible for compensation.

However, the GMB union is advising people that if they were blacklisted they stand to make much more by waiting for the outcome of litigation rather than settling for a fast-track pay-off.

A spokesperson for TCWCS said: “We are encouraging anyone in Scotland who worked in construction in the years leading up to and including 2009 to contact the TCWCS freephone helpline or look at the website for further information – we are really keen to find as many people as possible who are eligible for compensation, so do get in touch. Or if you know someone else who worked in construction, please encourage them to pick up the phone to us or log onto www.tcwcs.co.uk to find out whether they are eligible for compensation. Enquiries to the scheme are handled quickly and, if you are eligible, joining the scheme is completely free of charge. TCWCS is even covering the cost of independent legal advice for every eligible applicant to help them decide whether the scheme is right for them."

But GMB national officer Justin Bowden said: "Most people blacklisted by the construction companies behind TCWCS stand to win many times more from the courts. Therefore they should not be fooled by the cut price compensation on offer and should see it for what it is, a damage limitation publicity stunt.”

Law firm Leigh Day, acting for GMB, began action in July in the High Court in London seeking compensation for 122 GMB members blacklisted by Carillion and the other firms. GMB’s claims are joined with a further 449 claims by two other unions and one other party.

As part of the group litigation order, the four parties including GMB were given permission to write to all those blacklisted. The ICO has until 25th August to give Leigh Day  the addresses.

“Once we have the addresses we will be writing jointly to everyone,” Justin Bowden said. “When we write to all those blacklisted we will tell them that one purpose of the scheme is for the companies involved to avoid High Court litigation. We will urge workers to get in touch with their current or previous union for advice first.”

He added: “TCWCS does not mention that compensation in their scheme is capped, does not include damages for misuse of private information, and does not involve the companies giving any information about how they were involved in blacklisting. None of these restrictions are found in court.”

He concluded: “GMB has a simple message to anyone on the blacklist: get free legal advice from us or your union before you make any decisions. The companies should get serious and make proper restitution and close the book on this shameful chapter.”

Following discussions with Balfour Beatty’s major shareholders, Carillion has offered them an improved 58.268% share of the combined company if they accept a merger between the two companies.

Before talks broke down in the wake of Carillion’s surprise demand that the Parsons Brinckerhoff sale be cancelled, Balfour Beatty’s board had previously agreed to a 56.5% share for Balfour Beatty shareholders.

The new offer values Balfour Beatty at £2,086 million. The previously agreed deal valued it at £1,886 million.

Carillion said the improved offer represented a premium of 36% to the Balfour Beatty share price prior to news of the merger talks breaking and a 22% premium to the closing share price on 18th August 2014.

Carillion’s board said that it hopes that on the basis of these improved terms the board of Balfour Beatty will now get back round the table.

Under Stock Exchange rules, Carillion has until 5pm this Thursday, 21st August 2014 to make a final firm offer or to walk away. In order for discussions to continue and for mutual due diligence to be concluded, Balfour Beatty must request that the Panel on Takeovers & Mergers extend this deadline. Carillion said that it hopes this will now happen.

Carillion chairman Philip Green said "Given the scale of the prize for shareholders of both Balfour Beatty and Carillion from a merger of the two companies, the board of Carillion remains committed to moving forward in a constructive and collaborative way with the board and management of Balfour Beatty to create a world-class business and very significant value for the shareholders of both companies."

Although the merged company would be majority owned by Balfour Beatty shareholders, it would be controlled by Carillion executives, with a leadership team Philip Green as chairman, Richard Howson as CEO and Richard Adam as CFO – all from Carillion. Three Balfour Beatty non-executive directors would also join the board.

Carillion has also reaffirmed its offer to pay reasonable costs incurred by third parties bidding to purchase Parsons Brinckerhoff, up to £10 million in aggregate.

Within 20 minutes of Carillion issuing a statement outlingin its improved offer, the Balfour Beatty board put out a holding response, stating: "The board of Balfour Beatty notes the announcement made by the board of Carillion this afternoon. The board of Balfour Beatty will consider this announcement by Carillion and will make a further announcement in due course."

House-builder Persimmon has seen its half-year profits grow by more than 50%, thanks in part to increased use of offsite fabrication.

For the six months to 30 June 2014, Persimmon’s underlying pre-tax profit increased by 57% to £212.9m (2013 H1: £135.3m).

Total revenues of £1,198.1m were up 33% (2013 H1: £899.9 million).

Legal completions for the first six months of 2014 increased by 28% year-on-year to 6,408 new homes (2013 H1: 5,022) and the average selling price was 4.3% higher at £186,970 (2013 H1: £179,199). 

The board said that “the swift and significant increase in production has been supported by our Space4 manufacturing facility. This modern method of construction has enabled Persimmon to secure greater efficiencies in resourcing and site activities supporting the delivery of our build programmes”.

Space4 increased its output of insulated panel frames to construct 2,483 new homes in the first half of the year, a 37% increase over the first half of 2013.

Space4 operates the largest automated timber frame manufacturing plant in the UK.

Group chief executive Jeff Fairburn said: "Persimmon has produced another strong performance in the first half of 2014, taking advantage of the current market opportunities to deliver growth whilst strengthening the financial position of the business.

“As we have entered the traditionally slower summer trading weeks, we have been encouraged by our private sale reservation rate since 1 July which is currently running 9% ahead of the same period last year.”

Ibstock is increasing its UK brick production this year by 200 million units.

An additional 125 million bricks will be produced by Ibstock this year after a £22m redevelopment of a factory in Newcastle-under-Lyme last year and the re-commissioning of a mothballed plant in Leicester. 

With other production enhancements at other factories, the company is set to bring to the market almost an additional 200 million bricks in 2014.

Ibstock, a subsidiary of Irish building materials group CRH, closed its Leicester factory in 2008.

Total UK brick production in 2013 was approximately 1.73bn bricks.This year the figire is expected to be substantially higher, with Wienerberger also adding capacity this year at its 14 UK plants by 200 million bricks before the end of this year.

Fencing supplier Echo Barrier has launched a new version of its H2 sound reduction barrier.

The Echo H3 has been developed by the company’s acoustic experts and is now fire resistant and weatherproof.

It has a sound dampening core as standard, achieving noise reduction of up to 30dB, the manufacturer says.

New products also in production include an acoustic tent and a transparent barrier.

Technical director Peter Wilson said: “Our team of acoustic engineers are constantly researching and developing new solutions to ensure we can meet the needs of our customers. The number of contractors now specifying noise reduction solutions as part of their site management credentials is increasing rapidly, as the impact of noise on local communities becomes more of an issue.”

It’s all very well training civil servants in project management, but the ministers and permanent secretaries that make the decisions need training too.

That’s one of the conclusions of a highly critical Public Accounts Committee report, out today, into the work of the Major Projects Authority (MPA).

"There remain serious weaknesses in government’s project delivery capability,” said committee chair Margaret Hodge. “We welcome the creation of the Major Projects Leadership Academy, but the MPA needs to target top decision-makers as well as managers. This should include ministers, shadow ministers and permanent secretaries.”

Two ministers have attended half-day or full-day courses on project management run by the MPA and found it helpful, the report notes. “It would be beneficial to extend this support more widely, as it would help to develop greater awareness of project delivery issues at the highest decision-making levels in government.”

The report also says that there needs to be better planning at the outset of projects and greater transparency in decision making.

The MPA was established in March 2011 as a partnership between the Cabinet Office and the Treasury to improve project delivery across government.

In September 2013, the Government Major Projects Portfolio consisted of 199 major projects covering a wide range of activities, from transforming how departments do their work to building ships and motorways. These projects represent a considerable and rising cost to the taxpayer: the MPA reported in May 2014 that the whole-life cost of these projects was £488bn, an increase of some £134bn on the previous year.

Mrs Hodge said: "We support the work of the Major Projects Authority and welcome the progress it has made so far, but without stronger powers it is unlikely to achieve its aim of a systemic improvement in project delivery across government.”

The report says: The MPA is unlikely to achieve a systemic improvement in project management without stronger, more formal mechanisms for driving change. At present, the Treasury does take account of MPA recommendations when making spending decisions, but it is under no formal obligation to follow them. Equally, the MPA often has to rely on personal credibility and informal influence, rather than having formal mechanisms, to get its voice heard in its work with departments. For example, the MPA is helping with recruitment for leadership positions on several major projects, but only on an ad hoc basis and told us that its role is not yet ‘systematised’. This lack of formal powers reduces the influence of the MPA with the Treasury and with departments, limiting its ability to drive improvements in project management.”

It recommends that the chief executive of the MPA should have a formal mechanism available to set out his or her position if politicians over-rule. “Where ministers or officials reject MPA recommendations, there should be a formal and transparent process in place to document this.”

More controversially, the committee calls for more Treasury control over major projects. “The Treasury should take ownership and responsibility for overseeing the government portfolio,” the committee suggests. “It should ensure that decisions about whether, and how, individual projects should proceed are based on each project’s impact on the total portfolio’s value and risk, and the relevant department’s delivery capability and existing portfolio of projects.”

The full report, Public Accounts Committee – 10th Report: Major Projects Authority, can be downloaded at http://www.publications.parliament.uk/pa/cm201415/cmselect/cmpubacc/147/14702.htm

Travis Perkins Group is staffing up for a major expansion drive.

The builders' merchant group already operates from 1,900 sites around the UK across the 17 businesses that make up the company.  It employs nearly 24,000 people and is the UK’s largest supplier to the building and construction market. 

However, it wants more.

“Our ambition post-recession is to substantially increase trading space over the next five years,” said group property director Martin Meech. “This includes a considerable number of brownfield or implant branches and stores, and more than 30 trade parks.”

First step is putting in place a new team to drive the property acquisition and management programme, with five senior appointments.

Peter Webb has been appointed property director for the general merchanting division. Phil Joyce is divisional property director for P&H. Nick Pinney joins from Strutt & Parker to be property director for the contract merchanting division. Jim Adams has joined as property director for the consumer division (Wickes). Finally, Darren Screen has joined as property finance director.

This restructure has also created a further 20 new positions within the group property team at head office in Northampton, including the promotion of Graham Lund to director of construction.

Plastic pipe producer Polypipe has shown a steady start to life on the London stock exchange, reporting first-half numbers that reflect market growth.

Polypipe was floated in the stock exchange in April this year. Today it reported its results for the six months to 30 June 2014. Revenue was up 11% on last year to £168.2m and basic operating profit was up 29% to £22.7m.

However, initial public offerings (IPOs) are a costly business and exceptional charges of £12.4m were incurred in relation to the flotation costs. A further £8.6m of exceptional finance costs were incurred from a debt refinancing.

As a result the business made a pre-tax loss of £4.6m for the first half, compared to a £9.7m profit for the same period last year.

There was strong demand for residential piping systems from UK housebuilders, increasingly from smaller developers and projects outside of London and the southeast. There was also good demand from road and rail projects, new high-rise apartment blocks in London and from flood alleviation schemes.

Chief executive David Hall said: "I am delighted with the progress that we have made following the group's successful IPO earlier this year and these results show that we are delivering on the strategy we set out at the time. The group's healthy growth in sales and underlying profits demonstrates the confidence returning to our sector and a deserved reward for operational improvements and investment we made when market conditions were much tougher. We are well placed to capitalise on the future growth opportunities and I remain confident that we will deliver results for the full year in line with our expectations at the time of the IPO."

House-builder Bovis homes has reported a 75% leap in first half revenues and has more than doubled its profits.

In the six months to 30 June 2014 Bovis Homes made revenues of £322.1m (2013 H1: £184.4m). Profit before tax was up 166% to £49.4m (2013 H1: £18.6m).

With operating profit up 150% to £51.2m (2013 H1: £20.5m), the operating margin was 15.9%, up from 11.1% last year. This is expected to be more than 17% for the full year.

Bovis completed 1,487 homes in the half-year, a 54% increase on 963 for the same period last year and a new high for the company.

With 3,530 homes completed in the first 32 weeks of the year, the update strategic plan is to grow the business to achieve annual volumes of between 5,000 and 6,000 new homes, with a return on capital employed of at least 20% by 2016.

The land required to operate at this level will increasingly be sourced through strategic land conversion.  After a period of greater consented land market purchases, Bovis is reverting to more of a balance between consented land purchase and strategic land conversion.

Chief executive David Ritchie said: "In the first half of 2014 the group has delivered a record number of legal completions leading to a 150% increase in operating profit. This significant increase is the result of the compound positive effect of increased volumes, improved average sales price and stronger profit margins.

"The group has also had its most successful half year of land investment acquiring around 4,600 high quality consented plots on 23 sites.  This will support further sales outlet growth into 2015 and beyond, which is expected to lead to further strong improvements in return on capital employed.

"The strong trading position will enable the delivery of a significant increase in profits in 2014 in line with our expectations, subject to stable market conditions. With a further increase in capital turn, this level of profit is expected to generate a return on capital in 2014 of approximately 16%.”

Shareholders are set to benefit, with an enhanced dividend for 2014 of 35 pence per share, followed by a further 35 pence per share in 2015.

The latest Construction Trade Survey, published today, show that activity rose in the second quarter of 2014 across all areas of construction, including building contractors, specialist contractors, civil engineers and product manufacturers.

Future growth, however, may be put at risk by rising costs, as many contractors are still working on projects won at low prices. Cost inflation since winning these jobs has eroded expected profit margins in many cases.

Commenting on the survey, Construction Products Association economics director Noble Francis said:  “Firms across construction reported rises in output during Q2 and the majority of the industry is expecting activity to rise over the next 12-18 months.

“Unsurprisingly, private new housing was the key driver of construction activity.  On balance, 41% of contractors reported that private housing output rose in Q2 compared with a year ago.  The largest construction sector, private commercial, also enjoyed an increase in activity with 37% of contractors reporting that commercial output rose in Q2 compared with a year ago.  In addition, 46% of building contractors reported that work in publicly-funded education and health construction saw a return to growth, reflecting the recovery in capital investment in 2014/15 with less than a year to go to the next election. 

“Tender prices rose in Q2.  Many major contractors are still working on projects won in 2013 at relatively low prices but have been suffering from the key concerns of rising costs and skills availability, especially in specific sectors such as private new housing.  Overall, 80% of building contractors reported, on balance, that costs rose over the past year; 95% reported that materials costs rose over the past year and 75% reported that labour costs rose over the past year.  In terms of skills, 47% of building contractors reported that bricklayers and carpenters were difficult to recruit.”

{{image2}}

Key survey findings for Q2 include:

• 41% of building contractors reported that private housing output was higher than a year ago;

• 46% of building contractor firms reported public non-housing (education and health) output was higher than a year ago;

• 37% of building contractors reported that private commercial output was higher than a year ago;

• 58% of firms reported tender prices were higher than a year ago;

• 80% of building contractors reported that total costs were higher than a year ago;

• 95% of building contractors reported materials costs were higher than a year ago;

• 75% of firms reported that labour costs were higher than a year ago;

• Profit margins rose for the first time since the financial crisis six years ago (according to 5% of building contractors);

• 14% of specialist contractors reported being paid within 30 days, the highest recorded

• 47% of building contractors reported difficulty recruiting bricklayers and carpenters.

{{image3}}

The Construction Trade Survey takes data every quarter from six industry trade associations: Construction Products Association; Civil Engineering Contractors Association; National Federation of Builders; Federation of Master Builders; National Specialist Contractors Council; and UK Contractors Group.

UKCG director Stephen Ratcliffe said:  “There are some mixed signals in these results showing that there is some way to go before full recovery in the sector.  As we move towards the general election next year, UKCG will continue to stress to politicians on all sides of the political divide the need for a visible public sector pipeline of infrastructure investment and a steady flow of new projects."

National Federation of Builders chief executive Richard Beresford said:  “The good news is construction output is rising.  However, higher tender prices, materials and labour costs and difficulty in securing skilled labour at reasonable cost all highlight the fragility of this recovery.  Longer term institutional investment and more easily accessible finance options for the industry would go some way to securing stable, sustainable growth.”

Four out of 10 civil engineering contractors have employed apprentices in the past 12 months, according to the latest annual training and development survey by the Civil Engineering Contractors Association.

The picture appears to be getting better, however. Two years ago, only 19% of companies across the construction industry as a whole offered apprenticeships, according to a 2012 report by the UK Commission for Employment & Skills.

A third of civils contractors are also now recruiting graduate trainees – 32% CECA members took on graduates last year, the survey showed.

CECA’s membership comprises more than 300 contractors of all sizes, covering approximately 80% of the civil engineering market in England, Wales and Scotland.

CECA chief executive Alasdair Reisner said: “It is great news that contractors are recruiting the next generation of employees as the sector gears up to deliver major programmes of work in the future. CECA has long argued that an effective skills system is vital in developing an efficient workforce and is a key driver of economic growth.

“Industry must work together with government and skills providers to ensure the system is demand-led and can respond to the evolving needs of businesses of all sizes. Unless we can continue to recruit and train new entrants, the UK will face a substantial construction skills shortage over the next decade.”

Happy as he may be, the CECA survey still shows that most contractors are doing no training at all – whether at apprentice or graduate level.

Mr Reisner said that he wanted government help to push the message in schools and careers guidance centres that the infrastructure sector was a good place to work. “We need to ensure all children of primary and secondary age, and their teachers, parents and carers, are well informed about the wide variety of challenging, dynamic and exciting job opportunities available in our sector,” he said.

Thirty-six stalled house-building projects have been shortlisted for government loans to help get them started.

The Department of Communities & Local Government has a pot of £850m to lend to schemes for infrastructure that is needed to make the schemes viable. The money will go towards building road improvements, schools and parks to support the extra homes being planned.

The 36 schemes will collectively result in more than 200,000 new homes being built across the country, according to plans. The projects will go through a final due diligence process before receiving the funding.

Sites requiring support even include three schemes in the London area. The continued development of the Greenwich Peninsula is on the list, as is Ebbsfleet Eastern Quarry.

The funding will be available between 2015 and 2020 and will be in the form of a long term loan with interest.

The full list is:

• continued development of the Greenwich Peninsula in southeast London, to help provide nearly 10,000 homes
• Acton Gardens in Ealing, to help provide over 2,500 homes
• Wood Wharf development in London, to help provide over 3,000 homes
• Beaulieu development in Chelmsford, to help provide 3,600 homes
• Bishop Stortford North development in East Hertfordshire, to help to provide 2,200 homes
• redevelopment of the former Rugby Radio Station site, to help provide 6,200 homes
• Monkton Heathfield development outside Taunton, to help provide 4,500 homes
• DN7 initiative in Doncaster, to help provide over 3,000 new homes
• New Lubbesthorpe development in Leicester, to provide over 4,000 homes
• development of North Wellingborough, to help provide 3,000 new homes
• redevelopment of Arborfield Garrison in Wokingham, to help provide 2,000 homes
• Langarth development in Truro, to help provide 1,500 homes
• Cheeseman’s Green development in Ashford, to help provide 1,500 homes
• Dallington Grange development in Northampton, to help provide 3,400 homes
• development at Lawley Village in Telford, to help provide 2,500 homes
• Newcourt Urban Extension in Exeter, to help provide over 2,000 homes
• East Kettering development, to help provide 5,500 homes
• development at Hunts Grove in Gloucester, to help provide 1,750 homes
• Barwell development at Hinckley and Bosworth, to help provide 2,500 homes
• Branston Locks development in East Staffordshire, to help provide 2,500 homes
• development at the Festival Gardens site in Liverpool, to help provide over 1,500 homes
• Bath Riverside development, to help provide nearly 1,900 homes
• Colchester North Growth Area Urban Extension, to help provide 1,600 homes
• Weston Airfield development in North Somerset, to help provide over 2,500 homes
• Ebbsfleet Valley, to help provide over 3,500 homes – this site forms 1 part of the larger area that the proposed Ebbsfleet Development Corporation would cover as part of the 15,000 home Ebbsfleet Garden City initiative
• Overstone Leys development in Daventry, to help provide 2,000 homes
• North West Bicester development, to help provide over 5,500 homes
• Welborne development at Fareham, which will help provide 5,400 homes
• Middle Deepdale development at Scarborough, which will help provide 2,300 homes
• Thetford North development in Breckland, to help provide 5,000 homes
• Lincolnshire Lakes development in Scunthorpe, to help provide 3,500 homes
• Whitfield development in Dover, to help provide over 5,700 homes
• Bela Priors Hall development in Corby, to help provide nearly 3,000 homes
• Alphington development near Exeter, to help provide 1,500 homes
• West Witney development in Oxfordshire, to help provide 1,500 homes.

Closing down businesses and laying people off is not the same as creating synergies, Balfour Beatty has pointedly said this morning.

In a rallying call to shareholders to keep the faith, Balfour Beatty’s board has put out another wordy statement that seeks to maul Carillion’s analysis of merger benefits.

Yesterday Carillion set out details of how it expected to make synergy savings of £175m through a merger. (See previous report here.)

Balfour Beatty retorted that Carillion’s plan meant cutting its £2.8bn a year UK construction business to just £900m. Balfour Beatty said that it planned to grow, not scale back, and said Carillion’s assumptions were flawed.

Today Balfour Beatty’s board has issued a more detailed analysis of Carillion’s business plan, once again affirming its rejection of the merger proposal.

It said: “The board believes the proposed plan involves reducing Balfour Beatty's UK construction revenues by up to two thirds. Such rescaling would require a significant reduction in overheads, just to maintain current margins (equivalent to over 6% of the lost revenue).  This cost reduction will reduce the amount of available synergies that flow through to profitability. Cost savings driven by shrinking the business should not be confused with synergies. These reductions in cost will reduce the amount of the £175m that could enhance profitability.

“A smaller UK construction business would have a lower addressable cost base, further reducing the potential synergies available from any transaction. Incremental value for shareholders can only be generated by increasing absolute profit and cash returns.”

It also said that keeping Parsons Brinkerhoff rather than proceeding with the sale “exacerbates the scale of the challenge at a time when the management team would be undertaking a fundamental downsizing of the UK construction businesses”.

Balfour Beatty said that Carillion’s axe would come down heaviest on its UK Regional construction business, which accounted for £1.8bn of last year’s £2.8bn UK construction revenues. Yet the Regional business is the “best placed to benefit from any recovery in UK construction, and is already showing signs of such a recovery”, Balfour said.

It also said that Carillion’s sums failed to take into account the overlap between the businesses of the two competitors. “This could result in revenue and profit leakage,” Balfour said.  

Carillion’s plan to stop the Parsons Brinckerhoff sales process remains a massive stumbling block for Balfour Beatty. This is what caused the merger talks to collapse in the first place and move into hostile takeover phase. (See our 31 July report here.)

“Terminating this process risks damaging a significant part of the value of Balfour Beatty,” it said today.

Balfour Beatty is seeking to persuade its shareholders that its own plans for the business are better than Carillion’s axe.

It plans to close some regional offices and make some reductions to overheads, sell Parsons Brinckerhoff and refocus as an Anglo-American construction and specialist services group. Joint ventures in Asia and the Middle East will be retained subject to them being value accretive.

More selective tendering to focus on repeat customers, frameworks and larger contracts over £5m will “result in a large reduction in the number of contracts but only a modest reduction in revenue”.

Balfour Beatty said that its own strategy was already showing signs of success. “Balfour Beatty has already demonstrated that cost savings can be achieved independently of a merger; £70m of annualised cost savings have been delivered over the last three years,” it said.

“We will continue to demonstrate this plan is working by sharing leading indicators on a periodic basis, including on the size, composition and margin of our order book and in respect of overhead efficiencies. Our plan of progressive but substantial improvement avoids operational and value destruction risks, and leaves it much better equipped to exploit the market recovery that is under way.”

A rebuilding of Ealing Broadway railway and tube station in west London has been approved by local council planners.

Platforms will be extended to accommodate the high-capacity Crossrail trains that will pass through the station every six minutes at peak. To cope with the extra traffic, a new ticket hall will be built and the entrance will be doubled in size. New lifts will also be installed.

Construction will now start next year, with Vinci as main contractor, and is expected to take 18 months to complete.

The new station, designed by Bennetts Associates, will have a long, curved canopy running the length of the forecourt. The façade will be replaced with a new glass structure.

Client for the project is Network Rail, whose programme director for Crossrail, Matthew Steele, said: “Crossrail is one of the most important projects that Network Rail is working on and promises to deliver huge improvements to rail transport in Ealing, west London and out to Reading. The project team are committed to delivering these important works efficiently and in partnership with the local authority.”

{{image2}}

Housing maintenance contractor Mears and trade union representatives have agreed to talks with the arbitration agency ACAS.

Mears has withdrawn its proposal to de-recognise the unions GMB, Unite, Ucatt and Unison at its Brighton & Hove City Council contract and the unions have called off a planned protest demonstration.

As previously reported, Mears was looking to change the contract conditions of workers it had taken over from the council when the service was outsourced.

All parties will meet with the Advisory, Conciliation & Arbitration Service (ACAS) on 12^th September.

GMB branch secretary Mark Turner said: “Although we are very pleased to see Mears reverse their decision on de-recognition, the joint trade unions are fully aware that there is still a lot of work to be done on both sides at the meeting planned for September. Having ACAS involved to both facilitate and lead those discussions is a further positive step. It should do much to ensure that all sides are happy with any end agreement and that going forward all parties then work within the spirit of that agreement."

GMB organiser Gary Palmer added: “Mears conciliation in removing the threat of de-recognition means the joint unions will immediately reciprocate and therefore we have agreed to halt all planned actions against them, including in the first instance the August 19th Brighton race day demonstration. I look forward to now sitting down with Mears and ACAS to settle our differences and move forward within the spirit of an approved agreement."

A £12.8m programme of works starts in September to improve harbours links in Cornwall and the Isles of Scilly.

The government has allocated £7.3m of funding towards the scheme to improve harbour infrastructure at both St Mary’s and Penzance plus a further £1.8m to repair and resurface public roads on the island.

The harbour scheme will see the pier extended and widened at St Mary’s, along with provision of new freight storage facilities and improved access for passengers. It also includes dredging and some highway improvements in Penzance.

The roads funding for the Council of the Isles of Scilly will fund resurfacing for the majority of the local road network on the island and is a one off payment. The work will be done at the same time as resurfacing of the island’s runway, while all the necessary plant and machinery is already on the island.

The harbour infrastructure works are expected to begin this September and be completed by June 2015, with the St Mary’s Quay extension to be complete by March 2015 ahead of the summer season.

Balfour Beatty has dismissed Carillion’s proposed business plan for a merger of the two businesses, insisting that it wants to grow its construction business, not whittle it down to a third of its current size, as Carillion is proposing.

This morning Carillion said that it plans to have only a third of the combined profits of the two companies coming from construction, with the bulk of the money coming from support services, such as serving school dinners and cleaning office, and from investments.

In its statement, Carillion said it was the better managed business and if it got its hands on Balfour Beatty it could make that better too.  While Carillion is implicitly critical of Balfour Beatty management – perhaps suggesting that not many of them would keep their jobs for long after a merger that increasingly clearly would be a Carillion takeover – Balfour Beatty’s board is no less critical of Carillion’s thinking.

Balfour Beatty says that Carillion wants to retain Parson Brinkerhoff – the US engineering subsidiary that Balfour Beatty is in the process of selling – without providing any strategic rationale for it, other than that the turnover it generates would be nice to have.

It said of Carillion’s plans: “Several key business plan assumptions suggest an analysis based on the integration of businesses smaller than Carillion’s, rather than one that is substantially larger. In particular, the substantial rescaling – possibly by up to two thirds – in the revenue of Balfour Beatty’s UK construction business would eliminate future earnings recovery potential. It would also incur cash outflows of many hundreds of millions of pounds of restructuring costs and working capital.

“As a result, the board of Balfour Beatty has serious reservations as to the achievability of the stated synergy number and believes that it creates unacceptable operational and financial risks. In contrast, Balfour Beatty has clear plans for developing rather than partially eliminating the UK Construction Services business, including achieving future cost savings where 100% of the benefits achieved would accrue to Balfour Beatty shareholders.”

Balfour Beatty adds: “Carillion continue to require Parsons Brinckerhoff to remain part of the potential combined business, without providing any strategic or value related logic for its retention, other than for financial presentation purposes. Balfour Beatty has been clear that Parsons Brinckerhoff has not provided synergistic benefits for the group over five years of ownership, and this has not been disputed by Carillion. Their proposed approach would result in the likely termination of the Parsons Brinckerhoff sales process. This risks damage to that business, as well as eroding its competitive position, and potentially resulting in a loss of value to our shareholders.”

David Fison, who moved from leading a major contractor to leading a smaller family firm, has said that employees set to be made redundant in the wake of mergers and acquisitions have nothing to fear.

In what sounds like a call to come and join him at Osborne, David Fison says that the big company efficiency savings could benefit smaller firms.

He adds that working life at smaller companies can have a lot to offer.

Mr Fison joined family-owned Osborne as chief executive in 2009 after being sacked as chief executive of Skanska. Before that he was head of civil engineering at Balfour Beatty, where he worked for many years.

Without actually naming Balfour Beatty, his comments are clearly designed to be heard by his former colleagues who may become victims of merger synergies and tossed overboard.

He says: “I am watching the merger moves of the large contractors and consultants with great interest. It is what big companies do to gain market share and maximise earnings by cutting costs through combining teams, offices, etc. What that means of course is laying people off, often the most experienced and therefore most expensive – usually described in press releases as ‘creating synergies’. But this is happening at a time when the construction industry is becoming increasingly aware that it faces major issues over resources, by which I mean people as well as materials and plant.

“Various reports suggest that the industry lost 300,000 people during the recession. Another 300,000 are due to leave in very short order as the baby boomers of the 1940s hit retirement age. Replacing them will not be easy or quick. As investment in infrastructure and construction generally ramps us – with predictions of a 10% increase in workload over two years, having enough good quality, trained people is going to be the deciding factor in what work firms have the capacity to bid for and deliver. The anticipated synergies in those big mergers may not evolve as companies find they need to hang on to resources. But if they don’t, big company efficiency savings look like being to the benefit of smaller companies.

“Most small businesses have a longer horizon, less ambitious profit ambitions and can offer secure job opportunities for construction staff. The jobs may not be so big but we are closer to our customers, more agile, and value what individuals have to offer. For staff, and in fact for clients, it’s a bit like choosing a restaurant. You can go to a top class hotel with formal service or the local restaurant round the corner. Both give you good food to suit your budget but with a different style. It’s just about making the choice. Smaller businesses have a lot to offer, I believe. We are looking forward to welcoming new recruits going forward.”

Having been twice rebuffed by Balfour Beatty’s board, Carillion is now going over its head directly to shareholders.

Carillion has revealed that it has spent the week in meetings with several of Balfour Beatty’s major shareholders persuading them of the merits of a merger for the two companies.

Carillion says that if it gets its hands on Balfour Beatty it can achieve savings of £175m a year by combining the overheads of the two companies, primarily by imposing on Balfour Beatty what it regards as Carillion’s lower cost operating systems.

Carillion says that it has identified synergies across:

• back office, head office, and support function savings as well as from applying Carillion’s business operating model to Balfour Beatty’s UK business – £82m a year saved here.
• supply chain: using Carillion’s category management and demand planning solution, and through purchasing and procurement efficiencies – £36.5m a year to be saved here.
• information and communications technology (ICT): using Carillion’s outsourced back office solution, and through standardisation of systems and processes – £13m a year saved here.
• consolidation of the two groups’ property portfolios in overlapping areas, including head office, would save £17.5m a year.
• plus a further "£26m of annual recurring cost savings from agency labour, fleet, insurance and general overhead savings, including through the application of Carillion’s lean operating structure".

If the merger goes ahead before the end of this year, 40% of these synergies would be realised by the end of 2015 and the full 100% by the end of 2016, Carillion has been telling shareholders.

However, the restructuring would cost £225m to implement.

On Monday Balfour Beatty issued a statement setting out in detail why it had rejected Carillion's merger proposals. (See previous report here.) Carillion is clearly not yet ready to walk away.

Carillion has proposed that Balfour Beatty’s shareholders receive an additional cash dividend (or equivalent) of 8.5 pence per Balfour Beatty share (£59m in total) at the time Balfour Beatty’s final 2014 dividend would have otherwise been paid in 2015. This would be in addition to the final 2014 dividend they would be entitled to receive as shareholders in the enlarged group.

Carillion’s envisaged business plan for the group is to refocus significantly the UK construction services business, similar to the rescaling it undertook of its own construction business, avoiding low margin projects.

Growth would be focused on support services. Under Carillion's guidance, two-thirds of the combined group’s operating profit would derive from services and investments with just one-third coming from construction. This is despite Balfour Beatty being the UK's biggest construction company. Last year Balfour Beatty made £2.8bn revenue from UK construction alone. Carillion only turned over £3.3bn across its entire group.

In a statement this morning Carillion’s board said: “Carillion continues to believe in the powerful strategic logic and financial benefits of a merger with Balfour Beatty and is therefore continuing to consider its position. Carillion will make a further announcement in due course.”

In a separate statement today Carillion also reported its financial results for the first six months of the year, showing 5% rise in profit and a further 5% decline in turnover. (See report here.)

Carillion has reported a modest improvement in its finances for the first half of the year, with turnover down 5% but pre-tax profit up 5%.

The fall in turnover was in line with corporate strategy to reduce exposure to low margin construction work. However, the company says it is now “well positioned to target revenue growth in the full year”. The order book, including probable orders, has risen during the first half of the year from £18.0bn to £19.5bn, with £3.2bn of new and probable orders added over the six month period.

Revenue for the six months to 30 June 2014 was £1,871.0m, down from £1,964.6m in 2013. This follows a trend that saw Carillion’s first half revenue come down from £2.5bn in 2011 to £2.2bn in 2012.

Pre-tax profit for 2014 H1 was £67.5m, up from £64.2m in 2013 H1 and £64.1m in 2012 H1.

Revenue in the construction services segment (excluding Middle East) was down 8% to £462.1m. Underlying operating profit was up 1% to £19.2m.

Support services saw revenue shrink 1% to £1,100.8m and underlying operating profit grow 25% to £55.3m.

Public Private Partnership (PPP) projects generated £95.5m in revenue, down 24%, with underlying operating profit down 44% to £20.5m.

Revenue from Middle East construction services was down 4% to £212.6m, with underlying operating profit up 33% to £13.2m.

Chairman Philip Green said: "Carillion continues to perform in line with the board's expectations, reflecting the benefits of the early actions we took in response to the economic downturn, notably the planned rescaling of our UK construction business, together with our continuing strong work-winning performance. Having realigned our businesses to the size of the markets in which we operate, the group is well positioned to benefit from its strong work-winning performance over the last 18 months and from its high-quality pipeline of contract opportunities across our target markets. Consequently, the board's expectations for 2014 remain unchanged and we expect to make further progress in the medium term."

Derby City Council has released a time lapse video (below) showing progress on Bowmer & Kirkland’s £27.5m velodrome project.

At high speed, the video shows 265,000 nails being hand-driven into the 250-metre track of the Derby Arena velodrome over a six-week track construction period.

The geometry of the track was designed by a specialist track building company from Germany who also sourced, fabricated and installed the timber, which came from the pine forests of Siberia.

The venue is scheduled to open early next year.

Councillor Alison Martin, Derby’s cabinet member for leisure and culture, said: “Derby Arena is one of the most stunning sports venues in the country, clad in beautiful Olympic colours. This new video allows the world to see the cycle track take shape, which is the centrepiece of this state- of- the- art facility. Many cyclists will be eagerly waiting their chance to use the track, and thousands of people in and around Derby will be keen to use the other fantastic sporting facilities it provides.”

The music, in case you are curious, is Orchid, by Black Sabbath.

The ladder exchange programme is running once again this year, starting next month and running until the end of the year.

Under the scheme, contractors, businesses and householders alike can trade in old ladders and get a part exchange deal on a new one. The aim is to encourage the removal of dangerous damaged ladders from circulation.

The initiative was first run by the Health & Safety Executive in 2010 but was subsequently taken over by the Ladder Association, an industry trade body.

Ladder Association chairman, Cameron Clow said: “This is our third year running the Ladder Exchange, which has been an excellent means of getting out the ladder safety message while helping people in a practical way. Thousands of ladders were traded in last year, saving a lot of people and businesses money and, more importantly, hopefully lives as well.”

Information on where to exchange old ladders is available from the Ladder Exchange website (ladderexchange.org.uk).

A new law comes into force this week to stop council building managers ripping off their tenants.

The legislation has been dubbed Florries’ law after a 93-year-old woman who was hit with a £50,000 bill by her local authority for roof repairs that weren’t even needed.

The new law caps the amount councils can charge leaseholders for repairs to their homes.

Outside London the maximum level will be levied at £10,000 in any five year period. Within London the limit is £15,000. Any costs above this will have to be borne by the local authority itself.

Local government secretary Eric Pickles vowed to introduce the cap after his constituent Florence Bourne went to her grave with the shame of debt around her neck.

Newham Council based its fee on a guess because it had not conducted a proper survey on the first-floor flat. It later emerged the roof would have lasted another 40 years and the work was unnecessary. Florrie’s family say she ‘died of shame’ because she had never been in debt in her life and simply could not afford to pay the bill for work on her Brentwood home.

In response, Mr Pickles ordered officials at the Department for Communities & Local Government to review legislation governing council house repairs.

Mr Pickles said: “I was appalled at Florence’s treatment and was determined that no other leaseholder should ever have to endure the stress and hardship she experienced in the final weeks of her life.

“Florence served her country as a WAAF in the Second World War, raised a loving family and believed in paying her way, so to be faced with this excessive fee was more than she could stand.

“Charging excessive amounts for council house repairs not only targets some of the most vulnerable people in society, it can amount to a failure in a local authority’s duty of care.

“Under Florrie’s law, authorities will no longer be able to levy huge bills for future government-funded repair work on people who simply have little or no hope of meeting their demands.”

Mrs Bourne died following a heart attack she suffered when she was startled by the sound of roof tiles falling onto her balcony during the works that were later proven to be unnecessary. A leasehold valuation tribunal found last year that Newham Council had not commissioned a proper survey of the flat. An independent surveyor commissioned after Mrs Bourne’s death found that the roof would have lasted another 40 years.

More job vacancies in construction are being advertised but fewer people are applying for them.

That seems to be the message from an analysis by a recruitment website, which supports anecdotal evidence of a growing skills shortage in the construction industry that threatens to impact on growth prospects.

CV-Library says that the second quarter of 2014 saw a 10% increase in the number of construction industry job advertisements posted on its site, compared to the first quarter, and a 111% increase on Q2 of 2013.

Comparing year on year, job applications have seen strong growth on the back of industry recovery. In Q2 2014 there were nearly 31,000 jobs within the construction sector posted on the site and more than 370,000 job applications. By comparison, Q2 2013 saw just 14,500 jobs posted within the construction sector and just 24,0000 applications for them.

More recently, however, there is evidence that the tide has turned. Between Q1 2014 and Q2 2014 there was a 17% decrease in job applications to construction roles.

Balfour Beatty Services chief executive Kevin Craven is leaving to join Serco next month.

His new job sees him becoming CEO of Serco’s UK central government division and part of a new leadership team being put in place by new CEO Rupert Soames, who joined Serco in June after many years at Aggreko.

Brought up in South Africa, Mr Craven has been with Balfour Beatty since September 2006, when he joined as managing director of its facilities management arm, which was then called Haden Building Management Ltd, or HBML. He rebranded the business to Balfour Beatty WorkPlace in 2008 and in Janaury 2011 was made CEO of Balfour Beatty Services.

With the sale of WorkPlace to Cofely last December, his remit at Balfour Beatty diminished, despite having been given the Rail UK business to look after in its place.

Mr Craven sits on the Confederation of British Industry’s (CBI) public service strategy board, alongside Serco UK & Europe CEO Andrew White.

Building services consultant Hurley Palmer Flatt, or hurleypalmerflatt as it prefers to be styled, has recruited a former director of Chapman BDSP and Waterman to grow the business.

Adrian Gray has joined HPF’s executive team as group director, with a remit to focus on strategic leadership and business growth.

Last year HPF directors took back 100% control of the company, buying out the minority stake that venture capital firm ISIS purchased for £14m in 2011. How much the directors paid to get back their business has not been disclosed.

HPF has also recruited Garry Wall, formerly of Sinclair Knight Merz, to join its Sydney office as a director.

Other moves see promotions for Richard Windmill, who becomes regional director, and James O’Byrne, who becomes group director to lead new business sector development.

In the year to 31st March 2014, HPF saw a 21% increase in revenue to £23.9m with a £1.2m EBITDA.

Chairman Paul Flatt said: “Following our restructuring to one hundred percent independent ownership, we are now making significant investments in talent, both through strategic hires and by recognising the talent we already have in the company.

“We are now focusing on the future growth of our business, both through organic development and strategic acquisition. We are also looking at further overseas expansion, including through potential acquisitions, to match the success of our operations in Asia, Australia and other parts of the world.  Finally, we will continue to focus on growing our core sectors, which includes construction and property, TMT and financial services and oil & gas.” 

Two firms have been fined for safety failings after a demolition worker fell through a roof while removing asbestos.

Peter Tracey was removing asbestos roof sheets from a disused factory in Poynton, Cheshire when he stepped onto a fragile panel and fell more than five metres to the concrete floor below. He was airlifted to hospital with critical injuries, before being placed into an induced coma.

Haydock-based Local Asbestos Services Ltd and Leicestershire-based Construction Contracting UK Ltd were both prosecuted by the Health & Safety Executive (HSE) after an investigation found they had allowed workers onto the roof without appropriate safety measures in place.

Liverpool magistrates heard that 59-year-old Mr Tracey, from Fairfield, was part of a group of labourers hired by Local Asbestos Services to remove the asbestos sheets from the roof of the old factory on Middlewood Road during its demolition.

Construction Contracting was overseeing the project as the principal contractor and both companies had agreed that the sheets would be removed using a powered access platform underneath the roof. This would have allowed workers to cut the bolts holding the sheets in place, without the need for them to go onto the roof itself.

The court heard that, despite this, two of the men, including Mr Tracey, were allowed to climb onto the roof to remove the panels from above. No safety equipment, such as nets or harnesses, were provided to stop them falling or to prevent them from being injured.

On 5th April 2013, Mr Tracey was removing an asbestos sheet when it started to slip away. He went to grab it and stepped onto a clear plastic panel, which gave way under his weight.

Mr Tracey suffered critical injuries, including two collapsed lungs, fractures to his ribs and hip, and a ruptured left shoulder tendon.

Construction Contracting UK Ltd, of Ashby Road in Hinckley, Leicestershire, was fined £12,000 and ordered to pay costs of £23,502 after being found guilty of a single breach of the Construction (Design and Management) Regulations 2007 by failing to monitor the roof work to make sure it was safe.

Local Asbestos Services Ltd, of Salisbury Road in Haydock, was fined £8,000 and ordered to pay £6,191 in prosecution costs after pleading guilty to a single breach of the Work at Height Regulations 2005 by failing to ensure the roof work was carried out safely. Both companies were sentenced on 8 August 2014.

HSE inspector Kevin Jones said after the hearing: “Sadly this kind of incident is all too common in the roofing industry, and Mr Tracey has suffered debilitating injuries because of the failings of both Local Asbestos Services and Construction Contracting.

“Many industrial buildings have clear plastic panels on them designed to act as roof lights, but they are fragile and can collapse if workers stand on them. Both companies had prepared a risk assessment and method statement identifying a safe system of work, but this wasn’t implemented.

“Instead, Peter and another worker were allowed onto the roof instead of using a cherry picker underneath, which put both their lives in danger. This case should act as a warning to firms of the consequences of not following agreed safety systems.”

Structural steel group Severfield reports continuing progress in its return to stability.

In a trading update the company said that its performance and underlying financial position are satisfactory and the business remains on track for this financial year.

The UK order book of £171m remains solid, the board said, and the business continues to show improved stability following a reorganisation last year.

“Management's view of the market is unchanged, with continuing signs of improvement, but it remains likely to be later in the financial year before there is any notable impact on the size or mix of the order book,” the board said.

It added: “Overall, the group continues to be ideally positioned for recovery in the UK construction market with its good market position and strong balance sheet.”

Severfield has also benefited from the sale of its investment property in June for £3.9m, which was in line with book value.

Crossrail tunnel boring machine (TBM) Jessica has completed her 900-metre journey from Limmo Peninsula, near Canning Town, to Victoria Dock in east London.

Crossrail’s rail tunnels are now 83% complete and the project remains on programme and within the allocated budget.

Joint Venture Dragados Sisk is constructing the eastern tunnels between Pudding Mill Lane and Stepney Green, Limmo Peninsula and Farringdon, and Victoria Dock Portal and Limmo.

The 1,000 tonne TBM completed her final journey in just nine weeks, driving up to 41 metres per day. The machine will now be dismantled, with parts returned to manufacturer Herrenknecht for use on other tunnelling projects.

It is Jessica’s second Crossrail tunnel drive, having already created one of the two tunnels forming the spur from Pudding Mill Lane near Stratford to Stepney Green.

Jessica’s sister tunnelling machine, Ellie, will start the remaining twin tunnel from Limmo to Victoria Dock in the coming weeks. TBM tunnelling is scheduled to complete early next year.

Crossrail chief executive Andrew Wolstenholme said: “We continue to make good progress on Crossrail’s tunnels. The end is now in sight on Crossrail’s tunnelling marathon, but there is much more to do in the form of installing railway systems and fitting out the stations.”

{{image2}}

Balfour Beatty says that it needs to make further cuts to overheads in its UK construction business, despite having already cut £40m in annual spend over the past three years.

The news that further work remains to be done to turn around the business came as Balfour Beatty reported group revenues down 2% for the first six months of the year, excluding discontinued rail businesses, and impaired profitability.

Group revenue for the half-year was £4,851m (2013 H1: £4,956m). Underlying operating profit was down 31% to £37m. Underlying pre-tax profit was down from £47m for the same period last year to £22m this time, a decline of more than 50%.

The company said that operational issues in the mechanical and electrical engineering (Engineering Services) parts of the UK construction business had resulted in a disappointing 2014 first-half performance for the group as a whole.

“Across Construction Services UK our overhead and the cost improvement plans are well established, having already reduced overheads between 2011 and 2013 by over £40m. However as revenues have also declined over that period, overall overheads have remained above 6%. We continue to target further cost cutting initiatives, alongside the changes already underway,” the board said.

Suppliers as well as employees can expect to feel the squeeze: “The implementation of a single ERP business data platform for the business goes live in parts of the business from Q4 this year, concluding in Q1 2015. When that is completed we will have an enhanced analytical capability, which will improve operational control and help us consolidate procurement further.”

The UK order book declined by 11%, and was largely due to increased selectivity in bidding activity, and reduced order intake within the Engineering Services business.

After a weekend of press reports suggesting that the Carillion-Balfour Beatty merger might be back on, Balfour Beatty has this morning issued a lengthy statement detailing why it has rejected Carillion’s offer.

“The board has lost confidence in the likely delivery of a successful transaction and has therefore concluded that the current proposal from Carillion is not in the best interests of Balfour Beatty shareholders,” Balfour Beatty said.

It also revealed that Carillion has offered to pay off bidders for Parsons Brinckerhoff, so keen is it to keep hold of the profitable US subsidiary at the heart of the split between the two companies.

Carillion initially approached Balfour Beatty on 27 May 2014 with a merger proposal that would give 51% of the combined entity to Balfour Beatty shareholders and 49% to Carillion shareholders.

Several weeks of negotiations followed and a deal was agreed on the basis that Balfour Beatty shareholders got 56.5% to Carillion’s 43.5%, but Carillion got the three top jobs of chairman, chief executive and finance director. Balfour Beatty says that it was also agreed that its previously planned sale of its US engineering subsidiary Parsons Brinckerhoff would continue. At Carillion’s request, the equity split in the merger was predicated on Balfour Beatty retaining the proceeds from the sale of Parsons Brinckerhoff as freely available cash.

This was the deal behind the 25^th July announcement that merger talks were going on. (See previous report here.)

According to Balfour Beatty, at a meeting on 30th July Carillion told Balfour Beatty that it wanted to change the terms of the deal and keep Parsons Brinckerhoff business. The next day Balfour Beatty announced that it had terminated discussions on the basis of a fundamental concern regarding the proposed treatment of Parsons Brinckerhoff. With a sale at an advanced stage, Balfour Beatty was concerned about the costs that had been incurred by bidders should the sale be scrapped.

Other reports indicate that Carillion merely suggested delaying the sale of Parsons Brinckerhoff.

At a meeting between Carillion chairman Philip Green and Balfour Beatty executive chairman Steve Marshall on 3rd August, Carillion proposed a revised set of terms. Mr Green suggested that Carillion would pay the costs incurred to date by companies bidding for Parsons Brinckerhoff [reported to include Atkins, WSP and at least two venture capital funds] on the basis that these bidders would agree to keep their offers on the table should the Balfour/Carillion merger not ultimately happen.

Balfour Beatty said that its board considered the revised proposal but decided the risk of undermining the Parsons Brinckerhoff sales process was too great – “particularly as there is no strategic logic for its retention other than to enhance the earnings of the combined group”.

Balfour’s statement this morning said that it feared bidders for Parsons Brinckerhoff “may not regard the cost cover as adequate to remain fully committed to the process with the resultant risk that the sale process would be terminated”.

It also fears that “a failed sale process would materially impact the motivation and retention of Parsons Brinckerhoff management and employees and damage its competitive position in a rapidly consolidating professional services market”.

If the merger with Carillion did not go ahead, Balfour Beatty would then be left holding an asset – Parsons Brinckerhoff – that had effectively been devalued by its role as a passive pawn in what has effectively become a takeover battle.

Balfour Beatty’s statement concluded: “In light of these considerations on the revised proposal, the board has lost confidence in the likely delivery of a successful transaction and has therefore concluded that the current proposal from Carillion is not in the best interests of Balfour Beatty shareholders. With the Parsons Brinckerhoff sale process proceeding in line with the board's expectations, the board is clear that its current plans to refocus and simplify the group, including the sale of Parsons Brinckerhoff, remains the most attractive option. In this case, 100% of cost savings achieved by refocusing and simplifying the group would accrue to Balfour Beatty shareholders.”

In a separate announcement, Balfour Beatty said that the Parsons Brinckerhoff sale process was "well advanced, with completion expected by the end of the year, subject to shareholder approval".

{{image2}}

What is believed to be the first building of Sir Owen Williams, one of the giants of 20th Century British engineering and architecture, is to be refurbished.

A £6m joint venture of Workspace Group and Polar Properties has secured planning permission for its redevelopment of Enterprise House in Hayes.

The development will provide 98 apartments and a 38,000 sq ft business centre for creative industries.

Built in 1912, it originally housed the machine shop of the His Master Voice (HMV) gramophone production factory campus at Hayes that by the 1960s employed 22,000 people.

It is said to be the only remaining factory building in Europe designed by Arthur Blomfield and Sir Owen Williams. It was built by the Trussed Concrete Steel Company with a reinforced concrete frame, with posts and beams using the Kahn system of reinforcement patented in 1903 by Albert and Julius Kahn in Detroit, USA.

Workspace plans to refurbish the Grade II* listed factory building which will provide 38,000 sq ft of space tailored to the needs of small businesses with a particular focus on creative industries. One of the existing tenants to be retained will be the Vinyl Factory which specialise in producing high quality, limited edition, vinyl records.

Workspace chief executive Jamie Hopkins said: "We are delighted to have secured approval for Enterprise House in Hayes, a location that will benefit greatly by the arrival of a Crossrail station adjacent to the property. Enterprise House is one of a number of properties, in similarly advantageous locations to Crossrail, which Workspace is redeveloping.

“This is part of our wider redevelopment programme to enhance both core operational income and capital values by repositioning properties. The Enterprise House development will provide tailored space to the needs of small creative businesses, a capability which is at the heart of Workspace's key strengths."

The wider redevelopment of the 150-acre Old Vinyl Factory campus is being led by Cathedral Group, and parent company Development Securities.