The international news magazine for Balfour Beatty ◆ April 2007

One giant leapCentex joins the Group

Come fly with meExeter airport acquisition takes off

Update

News review News review 3

Editorial Team: Tim Sharp, Lynn Harvey Marjorie Hooper and Helen Baker +44(0) 20 7216 6800

Written, designed andproduced by Surrey HouseCorporate Communication+44(0) 1372 460111

Balfour Beatty Update ispublished by Balfour Beatty plc,130 Wilton Road, London SW1V1LQ, for Balfour Beatty people worldwide© Balfour Beatty plc 2007

Cover picture

The British and American flags flytogether symbolising the recentacquisition of Centex by BalfourBeatty.

See full story pages 15-18.

HER MAJESTY The Queen hasofficially opened the world’slargest centre dedicated to thecare, treatment and research ofchildren’s eye diseases. After theopening ceremony in February,the Queen met patients, staff andkey donors at the £15 millionRichard Desmond Children’s EyeCentre at Moorfields EyeHospital, London.

Among the guests was BobClark, of Balfour BeattyConstruction (BBCL), whichmanaged this world-leadingproject under the ProCure21procurement and contractframework. Work on the eight-storey building was completed in

December and the first patientswalked through its doors at thebeginning of February.

The state-of-the-art centre isnamed after Richard Desmond,owner of Express Newspapers anda former patient at MoorfieldsEye Hospital, who donated £2.5million to the fund-raising appealthat was launched in 2000.

It includes outpatients’ clinics,day surgery and day care units,research facilities, the RonaldMcDonald family accommodationunit, plus offices for patientrecords, admin and stores.

BBCL was involved with thedesign development and costmanagement of the project from

an early stage. “This includedliaising with the design team, costmanagers and the Trust, as well asthe specialist subcontractors,many of whom already had anestablished working relationshipwith Balfour Beatty,” explainedProject Manager Chris Miller.

The BBCL team handled thecritical process of the sequencingof the various trade contractors tomake sure that the work wentahead smoothly and on schedule.

Chris and his team had tocarefully ‘nurse’ the project, sincethe construction work went aheadalongside the day-to-day routine ofthe Moorfields Eye Hospital andthe Institute of Ophthalmology.

Queen opens children’s eye centre

Her Majesty Queen Elizabeth officially opens the Richard DesmondChildren’s Eye Centre at Moorfields Hospital.

BALFOUR Beatty completed theacquisition of Centex Construction, aleader in the commercial constructionindustry in the US, at the beginning ofApril. For further information on the newarrival and an interview with its Chairmanand CEO, Robert Van Cleave see pages15-18.

On joining the Group, Centex hasbeen renamed Balfour BeattyConstruction Llc and our civil engineeringbusiness, Balfour Beatty ConstructionInc has become Balfour BeattyInfrastructure Inc. Jim MoynihanPresident and CEO of HeeryInternational has now also taken directmanagement responsibility for bothBalfour Beatty Infrastructure Incfollowing the departure of Ed Phipps andPaul Copeland, President, Balfour BeattyRail Inc now also reports to Moynihan.

Moynihan has visited each of theoperation centres and met many of theclients. “My goal is to create respected,desirable, stable, and successfulinfrastructure construction and railengineering companies in North America,”he explains.

“Balfour Beatty Infrastructure is thebest name for our civil engineeringbusiness because infrastructure actuallydescribes the company’s business. Thenew name also takes into account the needto expand the company along the lines ofthe things we do well,” explainsMoynihan. “Infrastructure will prove amuch more accurate name over the long haul.”

In the UK, Andrew McNaughton has beenappointed Group Managing Director at Group Head

Office. He has taken over responsibilityfor Stent, Dutco Balfour Beatty and BKGulf, in addition to Balfour Beatty CivilEngineering.

As a result changes have also beenmade to the responsibilities of two of theother four Group managing directors,Andy Rose and Brian Osborne.

Following the completion of theCentex deal, Andy Rose will focusentirely on our US based activitiesBalfour Beatty Infrastructure Inc, BalfourBeatty Rail Inc, Heery and the newlyrenamed Balfour Beatty Construction Llc.

His responsibilities for HadenBuilding Management transfer to BrianOsborne, who has relinquished hisresponsibilities for Dutco Balfour Beatty,BK Gulf and Stent to AndrewMcNaughton. Andy Rose’s involvementwith Barking Power goes to Ian Rylatt,Managing Director of Balfour BeattyCapital.

The responsibilities of the other twoGroup managing directors, MikePeasland and Manfred Leger remainlargely unchanged, though Manfred hasjoined the board of Metronet to replaceJim Cohen who retired earlier this year.

Balfour Beatty Civil Engineering hasbeen split into two new operatingcompanies. Balfour Beatty Regional CivilEngineering, under Managing DirectorMarshall Scott will focus on the regionalmarket, while Balfour Beatty Major CivilEngineering, under Managing Director

Stephen Tarr will be responsible for selectedcustomers with a portfolio of large-scale complex projects.

Centex acquisition heralds new era Balfour Beatty Civil Engineering

(BBCEL) has won a Quality inConstruction Award for ProjectSafety on the Forth Bridgerefurbishment project.

The site team from BBCEL’sNorthern Division has clocked uptwo million man-hours with notone reportable accident – a“fantastic achievement”, saidManaging Director AdamThomson.

The safety milestone wasreached on a project that involvesextensive scaffolding,encapsulation, steel repairs, gritblasting and painting coupledwith the challenges of the LeadRegulations. In addition, the teamhas been working at height, overwater and alongside a live railway.

He said that weekly briefings,toolbox talks and daily riskassessments, reinforced by thecompany’s Take CARE safetyinitiative, were fundamental tothis achievement.

“The scale and complexity ofthis project is awe-inspiring,”commented the judges of theQuality in Construction Awardsorganised by Construction News.At the same awards, held at theLondon Hilton Hotel on March21, Balfour Kilpatrick was highlycommended for SafetyManagement Achievement for itsbehavioural safety initiative called‘Whatever it takes’.Balfour Beatty InfrastructureServices also collected a highlycommended award in theExcellence in the use of ICTcategory. The award was for itscoldsnap system, which uses GPSand software to check that roadsand pavements have been grittedcorrectly during the winter.

● BALFOUR Beatty Construc-tion struck gold during its workon a new £42 million officebuilding in the City of London.

The team working on the siteat 40, Holborn Viaduct has beenpresented with a prestigious Cityof London ConsiderateContractor gold award.

The award relates to thephase of the work that involvedthe demolition of the old DeBeers building that stood on thesite and the piling and ground-works for the new building thatwill take its place.

“I should like to congratulatethe on-site team who are proud tohave won this award. It is a toughone to win,” says Project DirectorAndy Clarke. “The award recog-nises that the requirements of theCode of Good Practice have beenconsistently exceeded,” he added.

QiC Award forForth project

Jim Moynihan

Andy Rose

Andrew McNaughton

BALFOUR Beatty has woncontracts worth £111 million to helpwith the regeneration of Paradise!

The work on the ParadiseProject in Liverpool will involvefive Group companies: BalfourBeatty Construction, Mansell,Balfour Kilpatrick, Balfour BeattyCivil Engineering and StentFoundations.

The contracts were awarded byGrosvenor, the internationalproperty group, which wasappointed by Liverpool City Councilto oversee the £920 scheme toregenerate an area of 42 acres in theheart of the city.

The project, which is due to becompleted in 2008 when Liverpoolwill be the European Capital ofCulture, will see the construction ofshops. Including two departmentstores, offices, leisure facilities, twohotels, a new bus station, homes and3,000 car parking spaces. It will alsocreate more than 4,000 permanentjobs. It is one of the largestdevelopment schemes currentlyunderway in Europe.

Access to the Albert Dock willalso be improved, creating a much-needed link between the waterfrontand the city centre.

Project Director Allan Henshallsaid that Balfour BeattyConstruction will act as the maincontractor for the development inthe eastern part of the ParadiseProject, consisting of 15 buildings,including more than 50 new shops,

160 apartments, commercialbuildings and 550 car parkingspaces.

The work being undertaken byBalfour Beatty involves giving amajor facelift to other buildings,including Liverpool’s oldest Grade 2listed warehouse, so that they can beused shops. Most of the work of thework will be completed by Marchnext year.

The City Council has praisedBalfour Beatty Civil Engineering forthe “fantastic” job it is doing inbuilding Liverpool’s new £19million cruise liner landing stage,which is due to be floated into placein May.

“Everything is on schedule,”says Angie Redhead, the City

Council’s cruise manager. “It is anexciting time for Liverpool. Oncethe new facility is in place, it willundergo a range of trials.”

It is another project that isbreathing new life into the city. Thefirst cruise liner is due to dock at the1,000 ft long berth on 29 July with1,100 passengers and six other linersare scheduled to arrive during 2007.The big day is 21 September whenthe QE2 arrives in Liverpool for thenaming ceremony.

Meanwhile, Carnival, theworld’s biggest cruise company, hasannounced that the Grand Princess,which carries more than 3,000passengers, will be adding Liverpoolto its cruise destinations and plans tocall there four times in 2008.

The ‘hospital within a hospital’has been built alongside the City Roadsite, with physical links to the mainbuilding, including a direct route tothe operating theatres.

As well as treating eye conditions,the centre will enable Moorfields EyeHospital and the Institute ofOphthalmology to establish a worldclass research programme to find newtreatments for children with eyediseases, for whom there is currentlylittle or no hope of a cure.

Ian Balmer, Chief Executive ofthe hospital’s NHS Foundation Trust,commented that this ‘fantastic’ newfacility meant they could continuehelping children from not only the UKbut also from around the world.

Paradise regained!

News review News review4 5

CONSORT, Balfour Beatty’sspecialist Public Private Partnershiphealthcare subsidiary, has been namedas the preferred bidder for the £152million PPP project to double the sizeof a hospital in Fife, Scotland.

Under the 30-year concession,Consort will provide a new wing toVictoria Hospital in Kirkcaldy,including 11 operating theatres, anemergency care centre, 17 wards,surgical and medical assessment units,maternity unit, a women andchildren’s unit, day intervention,

critical care, coronary care anddialysis facilities.

Construction and all buildingservices will be carried out by a jointventure of Balfour BeattyConstruction and Haden Young.

Maintenance and facilitiesmanagement will be provided byHaden Building Management, whileBalfour Beatty Capital will invest £7.5million of equity in the project.

Andrew Hatton, of Balfour BeattyCapital, said: “We are aiming forfinancial close in November this year

and for work to start on site inDecember.” The project is due to becompleted in 2010.

“We believe that our design,developed in full consultation withNHS Fife’s project team andhealthcare professionals, will create afirst class, efficient facility with animproved environment for patientsand staff,” commented Balfour BeattyChief Executive Ian Tyler.

The Fife project is Balfour Beatty’sninth major hospital scheme under thegovernment’s PPP programme.

Beating the drum for FifeDUTCO Balfour Beatty’s (DBB’s)$54.3 million contract to construct acanal at the heart of the massiveBusiness Bay development in Dubai isa double winner.

Not only did the company collectthe prize for Construction Weekmagazine’s Medium Size Project ofthe Year, but it also went on to win theoverall Project of the Year award.

The DBB team of 45 staff and660 operatives worked 24 hours a dayseven days a week in the desert toextend the existing Dubai Creekwaterway to link up with the ArabianGulf 13 km away and help fulfil thedream of the Ruler of Dubai. Theycompleted the project an incrediblefour months ahead of schedule.

His Highness Sheikh MohammedBin Rashed Al Maktoum’s vision is tosee Business Bay emerge from thedesert sands as a new commercial and

business centre within the city ofDubai.

“With the Ruler of Dubai takingsuch a personal interest in progress,the profile of the canal extensionproject was always going to be veryhigh,” explained Project ManagerAndrew Watson, who accompaniedDBB General Manager GrahameMcCaig and Deputy General ManagerZeyad Baker to receive the awards.

“At first, the programme wasthought to be very challenging, butthe fact that the initial scope of thework was completed four monthsahead of schedule was a significantachievement.”

At tender stage the plan was toextend the canal by 15 metres a day, atask that involved 15,000 cubic metresof excavations and then lining thecanal with quay wall blocks. But theteam was able to increase the rate of

construction to 25 metres a day. Oneinnovation was the disposal of groundwater which was overcome by initiallyusing temporary ponds and laterdischarging the water into completedsections of the permanent works.

The team faced numerouschallenges. The site projectmanagement team recognised that therapid mobilisation and training ofnewly recruited labour were crucial togetting the project off to a successfulstart. And with a section of the workbeing carried out alongside a wildlifesanctuary, stringent environmentalcontrols were put in place.

Construction Week said of itsaward to DBB: “By extending Dubai’sfamous waterway by 13km anddelivering their part of the projectahead of schedule, the judges agreedthat the firm had achieved somethingspecial.”

Double tops for Business Bay project

Business Bay,Dubai: “the judgesagreed that the firmhad achieved something special.”

Whitelee wind farm

A NEW £26.3 million educationcentre being built at Brighton byBalfour Beatty Construction isset to go straight to the top ofthe class. Study Group, forwhom the work is beingundertaken, believes that thedevelopment will set a newstandard for facilities providedfor international students in theUK. The five-storey complex,which is due to open inSeptember, will have 375 ensuite bedrooms for students, 62classrooms including sciencelaboratories, art studios and ITfacilities, plus a state-of-the-artlibrary, bookshop, medical roomand cafeteria.

GAMMON has won theHK$2.3billion contract to build OneIsland East, a 70 storey officebuilding on Hong Kong Island onbehalf of Swire Properties.

Andrew Yick Wing Fan,Contracts Manager, Gammon, says,“We won this contract because weengaged with the client at the startof the development and workedclosely with all consultants to carryout the feasibility study. Weprovided the necessary pre-construction advice and built upgood working relationships with allparties involved.”

Digital Project by GehryTechnologies, a pioneering 3D

software, is being used by Gammonto build up a digital model of thebuilding.

Gammon took full advantage ofthe technology to generate a 4Dmodel, designed to improve sitemanagement efficiency. “The 4Dsimulation is a detailed planningtool for critical elements and processchecking prior to physicalconstruction,” says Andrew. “It isused to optimise the work flow andarrangements for the four day floorcycle – the construction of onetypical floor takes four days. As weonly have 24 months to completethis project, it will help usenormously.”

IN JULY this year the eagerly awaited fourth vehicularcrossing from Hong Kong to China – the Deep Bay LinkNorth – will officially be opened to the public.

For Gammon it represents a remarkable achievementbecause, in the company’s 50 year history, this is the largestsingle civil engineering project the company has everundertaken. Rayland Lee, project director, says, “Otherprojects may have been larger, but they would have been inthe form of joint ventures.”

Gammon competed against 14 competitive tenders, manyof which were joint ventures, to win the HK1.7 billion (£110million) project to be constructed in a period of only 28months from the Government of HKSAR HighwaysDepartment.

The contract’s main feature includes a 4km dual threelane expressway of elevated viaduct structure from Tuen Munto Ngau Hom Shek, adjacent to the shore line of Deep Bay.During the peak construction periods, over 1,000 peopleworked on the project.

What sets Gammon apart, Rayland says, is that it is theonly company in Hong Kong which can provide a ‘One StopShop’ construction service for its clients, as it has variousconstruction elements of its own including a foundationdepartment, concrete batching plants and steel fabricationdepartments, as well as its inhouse engineering consultancyLambeth Associates, which provided temporary works designand other technical support.

“We had already established a working relationship withthe client two years before the actual tender period,” Raylandpoints out. “We demonstrated to them that we had a team oftechnically experienced staff that were capable of undertakingany large civil engineering project of this nature. Weundertook a thorough internal risk assessment workshop,ensuring that our comprehensive tender document includedsolutions to any possible technical site difficulties.”

From the start, Gammon was on top of the project andcompleted the foundation works in 14 months – three monthsearlier than expected.

Largest project builds on relationship

IN BRIEF IN BRIEFJOHN Lewis, the departmentstore giant, has been shoppingonce again with BalfourKilpatrick’s Nottingham office.The Nottingham team issupplying and installingmechanical and electricalservices as part of a £60 millionfacelift at the John Lewisflagship store in Oxford Street,London. Work is scheduled tofinish in September, well in timefor the all-important run-up toChristmas. This is the thirdcontract that has been awardedto the team, headed byOperations Manager GaryHomer, by John Lewis and itsproject manager, Styles &Wood.

FATHER and son Shaun andLiam Hall rescued two elderlypeople from a fire in a block offlats. The two men, employeesof Balfour Beatty Utilities, hadbeen repairing a burst watermain and were driving past theblock of flats at Morecambe,Lancashire, when a woman ranout into the street shouting thatone of the flats was on fire. Theyjumped out of their van andShaun, who is 40, grabbed along, steel bar – used to openand close valves on waterhydrants – to force open themain door of the flats. Theywarned the residents of thedanger, helped one elderlywoman outside, then went to thetop floor flat where the fire hadstarted and led the man wholived there and his pet Alsatiandog to safety. The man, whowas in his 70s and very frail,was given oxygen by the emer-gency services to overcome theeffects of smoke inhalation.

Getting a lift from technology

BALFOUR Beatty has made it ahat-trick of street lightingconcessions with the news thatConnect Roads, its specialistPFI road and street lightingoperation, has reached financialclose on a £36 million PFIcontract for Derby City Council.

Balfour Beatty will beresponsible for all street lightingand highway signage servicesunder the terms of the 25-yearcontract, which will be carriedout by Balfour Beatty PowerNetworks, the Group’s powerand cabling specialist.

The contract covers theongoing maintenance on 27,600lighting columns and 3,200illuminated signs and bollards.

A JOINT venture of MorrisonConstruction and BalfourKilpatrick is working on an £80million project to construct of oneof Europe’s biggest onshorewind farms.

The 122 turbines being builtat Eaglesham Moor, just to thesouth of Glasgow, will make amajor contribution towardsBritain’s commitment torenewable energy, feeding‘green’ power into the nationalgrid.

When completed in 2009, itis estimated that Whitelee windfarm will eventually provideenough electricity for 200,000homes.

Works valued at more than£20 million are being carried outby the Projects Unit of BalfourKilpatrick on the design, supplyand installation of electrical andcontrol systems, includingswitchgear and cabling.

The team, headed by AlanMcCann, Contract Manager, andSimon Lafferty, Unit Manager, isalso responsible for theconstruction of the substationand control buildings that willharvest and feed the power intothe grid.

News review News review6 7

A TEAM of volunteers conjured upsome animal magic to build a climbingframe for the new £3 million home ofChester Zoo’s ten orangutans.

The apes will be able to hang aroundin style when the Realm of the Red Apeopens its doors for the first time in May,thanks to the efforts of the team from theRugby-based GTBBJV, a joint venturebetween Balfour Beatty Rail Projects andCarillion.

Network Rail gave its blessing forthe volunteers, who have been workingon the multi-million pound contract toupgrade the electrification of the WestCoast Main Line railway betweenLondon and Glasgow, to give the zooand its orangutans a helping hand.

“We’re delighted to contribute tosuch an important global conservationinitiative,” said Ian Davis, Safety, Health,

Environment and Quality Advisor forBalfour Beatty Rail Projects.

The work was carried out inDecember and was a great Christmaspresent from the team to contribute towhat will be the finest centre in theworld in the fight to save the criticallyendangered Bornean and Sumatranorangutans.

Chester Zoo’s Michelle Duma said:“The Realm of the Red Ape is the largestproject in the zoo’s history and we arereally grateful to Network Rail and themen from Balfour Beatty Rail Projectsand Carillion for their contribution.”

The members of the team and theirfamilies have been sent tickets byChester Zoo so they can see forthemselves how much the apes areenjoying their new home with itsspecially built climbing frame.

THE new York College, one ofthe biggest building projects ofits kind in the UK, is set to openits doors to some 12,000students and 600 staff inSeptember.

Balfour Beatty Constructionwon the 96-week, £46 millioncontract to design and build thenew college with its state-of-the-art facilities that will not onlybring social and economicbenefits to the city but will alsoprovide a massive boost tofurther and higher education in

York and North Yorkshire.The existing campus is being

replaced by a four-storeybuilding of 30,000 square metresat a site on the Tadcaster Roadsome three miles to the southwest of the city centre.

The centrepiece of thebuilding is a glazed atrium andother facilities are a nursery,two-storey car park andextensive facilities formotorcycle and bicycle parking.The playing fields will includean all-weather pitch.

Hong Kong gun marksfifty years of GammonThe work

involved drillingfour-metre deepholes and erecting42 timber polesranging in lengthfrom 12 to 22metres. As well asthe orangutans, the Realm of the RedApe will include a number of animalspecies new to the zoo, including theworld’s longest snake, a reticulatedpython, and the world’s largest insect,the Giant Walking Stick.

It was the second wildlife projectundertaken by the GTBBJV. Lastsummer it also volunteered to constructa pond-dipping platform and disabledaccess path to a new classroom atCannock Chase for the StaffordshireWildlife Trust.

Volunteers go ape in Chester zoo

Top facilities mark York College build

CELEBRATIONS to mark thefounding of Gammon 50 years agoliterally began with a bang – thefiring of Hong Kong’s noonday gunon January 2.

The gun was fired by ChiefExecutive Thomas Ho, pictured,who was accompanied by directorsand representatives of BalfourBeatty and Jardine Matheson, theinternational trading conglomerate,which each owns 50% of thecompany.

Over the past 50 years Gammonhas become one of Asia’s leadingengineering and constructioncompanies, with its headquarters in

Hong Kong and employing morethan 2,000 people.

The ceremony provided echoesof the company’s history. Thenoonday gun was reconstructed andrelocated to its present site byGammon 26 years ago for JardineMatheson. And across the harbourfrom the site is Kai Tak, whereGammon’s first project was to builda new runway for the airport.

“Since that time we haveprospered within Hong Kong andhelped shape the modern face of theterritory,” said Mr Ho. He thankedBalfour Beatty and JardineMatheson for their support and said

that their complementarycapabilities would contribute to thedevelopment of the business inyears to come.

In addition to other events thatare planned during the year for staffand business partners to mark thecompany’s fiftieth anniversary, adonation was made to Mindset, acharity that supports mental healthorganisations and projects in HongKong and Mainland China.

“We remain committed togrowing with and serving HongKong and the region through aconstant search for excellence in allwe undertake,” added Mr Ho.

WINNER of the inaugural Chairman’sGraduate Prize is Emma Garner, ofBalfour Beatty Construction. She waspresented with a trophy and a cashprize of £1,500 by the Chairman ofBalfour Beatty plc, Sir David John,for her idea that the judges decidedmade the greatest contribution toinnovation in the Group.

Her ‘big idea’ was thedevelopment of an easy-to-understandcolour coded system that instantlyshows the status of a project andidentifies the areas that need specificattention.

“I designed an Excel programwhich pictorially shows at a glance theareas that are behind, ahead or on

programme,” said Emma, who hasworked with Balfour Beatty since2002 when she was employed atWeavers Wharf, Kidderminster, duringher year out. She has since worked onthe South Birmingham andBirmingham New Hospitals projects.

What impressed the judges wasthat Emma’s system highlighted anyproblem areas to both project and sitemanagers, which means that actionplans can be put in place earlier.

There were three runners-up:Chris Mayer, Haden BuildingManagement; Alex Tollington, Stent;and James White, Balfour Kilpatrick.They each received a book and cashprizes of £500 at the ceremony at the

Emma wins first Graduate Prize

Sir David John, Chairman of Balfour Beatty plc hands the inauguralchairman’s Graduate Prize to Emma Garner of Balfour Beatty Construction.Runners-up were, from left to right, Chris Mayer of Haden Building Management, Alex Tollington of Stent, and James White of Balfour Kilpatrick

Group head office in London.Chris developed a user-friendly

electronic version of the standardCORGI paperwork that HBML gasengineers have to fill out. Alex’sidea is to equip engineers with aPersonal Data Assistant now builtinto many mobile phones to storeprocedures and data that are notalways readily accessible. Jamesdeveloped an improved method ofmonitoring the progress of a projectagainst the original programme,including a measure of overallproductivity.

The 2007 award was open tothose who joined the Group on agraduate development scheme in2005 and Emma, Chris, Alex andJames were shortlisted from themany applications submitted bygraduates from many of theoperating companies in the UK.

Chairman of the judging panelwas Sir David John, and the otherjudges were: Mike Peasland andBrian Osborne, Group ManagingDirectors; Paul Raby, Group HRDirector; and Tim Sharp, Head ofCorporate Communications. “It wasvery encouraging to receive somany excellent entries,” they said.

● Balfour Beatty wasshortlisted in the 2007 NationalWork Placement Awards. Theseannual awards encourage andreward companies that display goodpractice in work experience, puttingthought, time and effort intohelping students developemployability skills.

Grant keeps Youth Games running London Boroughs of Hounslow, left, and Lambeth, above, receivetheir sponsorship cheques from Ian Tyler

BALFOUR Beatty has teamed upwith radio station Capital 95.8’s Helpa London Child scheme to launch a£40,000 sports development grantprogramme that will help developLondon’s young sports stars of thefuture.

This new sports aid schemeunderlines Balfour Beatty’scommitment to support sport in thecapital, since it comes on top of theGroup’s decision to continue itssponsorship, begun in 2006, of thisyear’s London Youth Games.

Applications for grants involving20 different sports were submitted byall 32 London boroughs and the Cityof London. Eight were short-listedand two – Hounslow and Lambeth –were chosen to receive awards of£5,000.

Hounslow is to use its grant on a12-week scheme called ‘Cheer upHounslow’ which will focus oncoaching girls and young people withdisabilities. It is also hoped to start a

Hounslow cheerleaders team.Lambeth plans to use the money

to set up the Lambeth CommunityJudo Club in an area which has beengiven a blanket Anti-SocialBehaviour Order (ASBO) and which,it is believed, would benefit from theintroduction of a structured sport. Allthe other boroughs each received agrant of £1,000.

The cheques to the two winningboroughs were presented by MarkRichardson, the Olympic 400 metresilver medallist, at a ceremony hostedby Jim Fitzpatrick MP, Minister forLondon, at the House of Commonson 29 March .

Ian Tyler, Chief Executive ofBalfour Beatty, said that the Groupwas heavily involved in developingthe infrastructure of London,including schools, hospitals, housingschemes, roads and the LondonUnderground

“It is critical to a business suchas ours not only that we build

London’s physical infrastructure, but,while we are doing so, we add socialvalue to the communities in whichwe operate. We believe this grantsscheme offers a great opportunity tomake this year’s Games even morememorable.”

Anthony Kendall, Chair of theorganising committee of the LondonYouth Games, which wasinaugurated in 1977 as part of theQueen’s Silver Jubilee celebrations,commented: “The children takingpart in the Games today will be theathletes of tomorrow and potentialmedal winners at the 2012Olympics.”

More than 25,000 children willcompete in more than 30 sports inthis year’s London Youth Games,with the qualifying events being heldin May and June. The finals forprimary schoolchildren are on 28June, while those for secondaryschoolchildren take place on theweekend of 30 June and 1 July.

The Archbishop of York, Dr John Sentamu, formally blessed thecollege in March

Preliminary results Preliminary results8 9

UPDATE: Were you pleased with the 2006 results?

IPT:Yes. They reflect a good year all round, with avery good quality of work being won and executedsuccessfully. We have generally strengthened ourrelationships with our customers and our on-goinggrowth continues to be both disciplined and sensiblydirected. By my reckoning, that’s 10 consecutive yearsthat Balfour Beatty has improved its profits andearnings by more than 10% – a record of which, Ithink, we can all be proud.

UPDATE: Last year we talked about the strategyyou had recently set. How much progress have youmade in implementing your medium-term growthplan since?

IPT: I am glad to say that we have made substantialprogress in all the relevant areas. In Balfour BeattyCapital, we have continued to win concession projectsunder UK PPP, but we have also set up offices inAtlanta, Munich and Singapore and each of the newbusinesses has already submitted serious bids in itsnew marketplaces.

Here in the UK, we said we would move beyondPPP and invest in other types of infrastructure asset.We came second in the race for London CityAirport, but were more than happy to succeed inacquiring Exeter International Airport. This is oneof the fastest-growing regional airports in the UKand has great potential to become the WestCountry’s airport of choice.

In regional contracting, we acquired Birse, which

has significantly improved our position in civilengineering markets in the north of England and theMidlands and taken us into new specialist disciplinesand markets.

Our professional and technical services business,Balfour Beatty Management, has grown substantially,with excellent new project wins for National Grid andUnited Utilities, a very successful on-going majorproject at King’s Cross Underground Station andmajor opportunities under development for BAA andthe Highways Agency.

UPDATE: You said last year that growing outsidethe UK was not an immediate strategic priority andyet you have made a major acquisition in Centex inthe US. What has changed?

IPT: When I said it wasn’t an immediate strategicpriority, that didn’t mean we wouldn’t take a goodopportunity if we found one and Centex is a verygood opportunity indeed.

You could search for years and not find acompany with so much quality, such goodmanagement and prospects and such a compatibleculture. In one step, it makes us a very serious playerin the US and offers us lots of new opportunities togrow in the future. At the same time, Heery goesfrom strength to strength and the US civil engineeringand rail businesses are also on an improving trend.The US is going to be increasingly important for us inthe future, which is why Group Managing Director,Andy Rose, will now dedicate all of his time to ourbusiness there.

2006 results show a promising future

THE Group continued to make very good progress in 2006. Profits andearnings continued to move ahead. Operating cash flows were

strong and our net cash position remained over £300 million. The orderbook expanded significantly to reach a new record of £9.1 billion.

Our performance in non-financial terms has also showed significantimprovement with lower accident frequency rates for the fifth yearrunning, better management of our environmental impacts and furtherexpansion of our positive involvement with the communities which weserve. Update spoke to Ian Tyler about the last 12 months and sought hisviews about the current year.

Left, Anthony Rabin, BalfourBeatty’s financial Director, and

Ian Tyler, Chief Executive

Revenue

£5,852m£4,938m

Revenue rose by 19%

Profit from operations*

£144m£ 115 m

*before exceptional items and amortisation of intangible assets.

Net investment income*

£19m

£8m

*before exceptional items and amortisation of intangible assets.

Pre-tax profits*

£152m£134m

Pre-tax profits rose by 13%**before exceptional items and amortisation of intangible assets.

▼

10 11Preliminary results Preliminary results

BALFOUR Beatty has been voted the sixthmost admired company in the UK. Thisaccolade, together with top spot in theconstruction sector, came in what areregarded as Britain’s business Oscars –Britain’s Most Admired Companies Awards2006.

Management Today magazine, whichruns the awards, says that Balfour Beatty “iswinning orders and acclaim worldwide”. Thecompany has leapt up the league table from twentieth position in2005

What makes success in these awards, now in their twelfth year,so satisfying is that the votes are made by the bosses of 220 of theUK’s largest companies in a survey conducted by the NottinghamBusiness School. Analysts at leading City investment firms also takepart in the poll.

Management Today says that the company, which used tolanguish well down the league tables, “has had a dramatic reversal offortune”, underlined by its bulging order book.

Paul Raby, Director of Human Resources, commented:“Everyone associated with Balfour Beatty can take pride in thisendorsement, because it tells us that our peers recognise both thestrategies that we have in place to drive our business forward and alsothe efficiency and commitment with which we are carrying them out.

“Equally importantly, this is a view of Balfour Beatty that isshared by our customers whose votes have come in the form of anumber of excellent contract wins in the last few months and anorder book that now stands at £9.1 billion.”

The awards were presented at a gala dinner at Claridge’s,London.

The 220 companies that vote in the awards are made up of theten largest UK-based companies by market capitalisation across 22different sectors, from the likes of banking and chemicals totelecommunications and retailing. Respondents are asked to rate theirpeers on their performance across key criteria on a scale of 0(representing poor) to 10 (excellent).

Company leaps intotop ten most admired

Earnings per share*

27.3p24.1p

*before exceptional items and amortisation of intangible assets.

Dividends

9.1p8.1p

The Board has recommended a final dividend of 5.2p per ordinary share, making a total dividend for the year of 9.1p an increase of 12%.

Net cash

£305 m

£315 m

Our year end net cash position was £305 million following acquisition expenditure of £80 million and before taking account of the consolidation of £21 million non-recourse net debt held in PPP subsidiaries (2005: £14m).

Order book

£9.1 billion£7.6 billion

The year end order book increased by 20%, with over £1.0 billion of further work at preferred bidder stage.

Exceptional items

£25 million charge

£4 million profit

There were a number of exceptional items, the largest of which was a non-cash asset write-down taken at the half year.

UPDATE: What are your current thoughts on the Olympics?

IPT: Our consortium didn’t get the Delivery Partner role we bidfor last year and so now we are looking at individual projects asthey come to the market, on their own merits. We have, ofcourse, won the work to upgrade and extend the East Londonrailway line, which is very much a part of the Olympic transport plans.

UPDATE: Do your main markets still give you cause for optimism?

IPT: Absolutely. Our order book, which was over £9 billion atthe turn of the year, has grown since, not least through thearrival of Centex. A lot of our large-scale projects in hospitals,schools, utilities, roads and facilities management, for example,are in their early stages of development and our bidding teamshave, generally, never been busier. Even in those markets whichare not growing – like UK rail for example – our businesses arestill strong and have good backlogs.

UPDATE: What would you say was the highlight of your year?

IPT: As you know, we put a lot of time and effort into keepingour people and members of the public safe. This year, wereduced our accident frequency rate by a further 24%, despiteever-increasing numbers of projects and employees. During2006, I undertook detailed safety reviews with all the operatingcompanies to discuss how we can keep on improving and to re-emphasise the targets we set ourselves.

UPDATE: How does 2007 look at this stage?

IPT: It looks very promising although, as ever, we have toexecute the work in front of us faultlessly and satisfy ourcustomers’ demands. Our businesses are progressing well.Centex will add a lot to our Group in many ways and ouropportunities continue to proliferate. A group as big as ourswill, of course, always have challenges, but I believe we arevery well placed to continue our successful progress ofrecent years.

The Group’s tax rate was 39% of profit before taxation, exceptional items and amortisation of intangible assets, excluding the Group’s share of the results of joint ventures and associates. The increase follows the recognition of a prior year credit in 2005.

Taxation

39% 35%

▼

Building, Building Management and Serviceshighlights:

● Over £750 million oflong-term facilitiesmanagement contractssecured

● Major hospital schemesin Birmingham andGlasgow commence

● Acquisition of Charter inthe US. Pictured, theCorsicana Stadium

● Another strong year ofsocial housing growth

Civil and Specialist Engineering and Serviceshighlights:

● Acquisition of UKregional civil engineerBirse. Pictured, amotorway bridge beingmoved into place

● Preferred partner forNational Grid EasternOverhead Line andCable Alliance

● Northern GasNetworks utilitiescontract secured

● Improved performancein Hong Kong andDubai

Investment and Developments highlights:

● BirminghamHospital and Schoolsschemes reach finan-cial close

● Exeter InternationalAirport acquired for£60m in January2007

● Preferred bidderappointments forKnowsley Schools,pictured, DerbyStreet Lighting andin January 2007, FifeHospital

● PPP investment busi-nesses established inthe US, Germanyand Singapore

Rail Engineering andServices highlights:

● Waterloo and City lineupgrade completed ontime

● East London linecontract secured

● Nuremberg-IngolstadtLine, pictured, openedon time

● Good progress onmajor works atHeathrow Terminal 5

13AirportsAirports12

Come fly with me...In setting up RCA and acquiring Exeter &

Devon Airport Limited, Balfour Beatty hasclearly signalled its intentions to build a

portfolio of regional airports in the UK, Europeand the US.

Wholly owned by Balfour Beatty Capital,RCA was formed in June 2006 to acquire, manageand develop regional airports. For the Exeter bid,Balfour Beatty Capital joined with London CityAirport (LCA) who became its technical airportoperator partner.

Balfour Beatty Capital is one of the UK’slargest and most experienced PFI investors andhas raised more than £7 billion of funding for itsmany PFI infrastructure projects. It has a broadrange of skills from project promotion anddevelopment through to financing, projectexecution, long-term asset management andoperations.

But, as Stewart Orrell, Director of AssetManagement at Balfour Beatty Capital explains,the move into airports stems from an investmentstrategy that is now actively seeking non-PFIopportunities that utilise the competencies of thewider family of Balfour Beatty companies andwhich offer the prospect of further development.

“The purchase of Exeter Airport was a perfectchoice,” he says. “It is currently operating at peakcapacity and requires significant capitalinvestment to improve passenger facilities.Importantly, we’re now actively bidding on otherairport opportunities and we believe other

regional airports will also come on the market,creating a pipeline for future investment.”

Stewart pointed out that Balfour Beattyalready has the necessary development skills.Balfour Beatty Management is the single largestsupplier of construction services to BAA atHeathrow’s Terminal 5 and the Group also hassignificant contracts at Glasgow and Edinburghairports. Other major airport projects have beenundertaken at Stansted, Gatwick, Hong Kong,Dubai and Miami.

“What was missing from the equation forExeter was the operational skills,” he says. “andin London City Airport we found a valuablepartner.

“Exeter International Airport has a greatfuture, representing the better, moreenvironmentally sustainable option for local airtravellers who no longer have to drive 200 miles oncongested motorways to Gatwick,” he said.

Devon County Council decided to sell ExeterInternational Airport as a way of securing its long-term future. Under the terms of the saleagreement, RCA has purchased the airport. LCAwill provide management expertise through atechnical services agreement to supportoperational function of the airport as it grows andis developed. The council retains a ‘special share’and a non-executive seat on the board.

RCA was the unanimous choice of thecouncil’s all-party steering group from a shortlistof six bids. The council was particularly impressed

by RCA’s vision that Exeter International Airportshould become the ‘airport of choice for the southwest region’.

As John Spooner, RCA Director of AirportManagement and now acting Managing Directorof Exeter International Airport itself, explains:“The south west is more popular than ever both assomewhere to live and work, as well as a leisuredestination.

“Our task is to build on the airport’s alreadyimpressive growth record of recent years, deliveran efficient, high-quality service and offerexcellent value for money.”

Development plans include a new departuresbuilding which is expected to be constructed by2010. The initial development phase will alsoinclude improvements to the airport’s surfaceaccess, stand and apron enhancements and anincrease in car parking capacity.

RCA’s plans were given an unexpected boostwhen Flybe, the low-cost carrier based at ExeterAirport, announced its acquisition of BA Connectearly in the New Year.

“This is extremely good news for the airport aswell as the entire region,” says John. “It effectivelymakes Flybe Europe’s largest regional low-costcarrier.Additionally, the deal means that alltraining, engineering and simulations facilities willbe located at Exeter Airport, bringing hundreds ofnew job opportunities.”

John Spooner has an extensive background inairport management. Prior to taking up the new

position at RCA he spent five years as MD ofManchester Airport and before that he was MD ofEast Midlands Airport.

Whilst at East Midlands, John took onresponsibility for the management anddevelopment of Bournemouth and HumbersideAirports. He was also Chief Executive of NationalExpress Group’s airports division and oversaw theprivatisation of Stewart Airport in New York.

Since 5 January John has been working hardwith the airport management team and staff todevelop the company’s business plans.

“At the moment development plans are focusedon improving the levels of investment in terminalsto create a better passenger experience,” he says.

“A key part of this is to maintain the very highlevels of customer service that our staff havealready achieved. This is an ethos we want toencourage, and the airport’s 350 staff andmanagement have reacted extremely positively tothe new RCA vision.”

Before any major construction anddevelopment work can begin, RCA must firstsubmit a comprehensive Airport Master Plan to theDepartment for Transport (DfT). This plan will

outline RCA’s strategic vision for ExeterInternational Airport over the next 30 years.

Details to be covered in the Master Plan includerunway and terminal capacity constraints and thefactors which could affect them, such as aircraft size,scheduling, plus environmental and safety issues.

“We’re aiming to make this the subject of thewidest possible public consultation process in theregion during the summer,” says John. “Via ourwebsite we’ll be encouraging feedback from localgovernment, villages, business associations,customers and other airport users. Our aim is todemonstrate that we really want to consult with,and listen to, all stakeholders.”

A final Master Plan will then be submitted tothe DfT early in 2008.

By a happy coincidence, Exeter also happens tobe where one of Balfour Beatty’s first PFI projects,the A30/A35 DBFO Road project, began.

“This road goes right past the airport and soopened up better surface access,” commentsStewart Orrell. “This played a positive role inallowing the airport to develop and so it’s perhapsfitting that Exeter should also be the location of ourfirst non-PFI project.”

Exeter InternationalAirport – at a glanceLocation: Five miles from Exetercity centreDestinations: Currently 28 UK andEuropean scheduled servicedestinations with daily links to thehub airports of Amsterdam andParis together with 23 chartersummer destinations which includetwo weekly flights to Toronto.Opened: 1937Numbers: 1938 – 379 passengers 2004 – 380,000 2005 – 63% rise to 618,000passengers2006 – 36% rise to 842,000passengers2007 – More than one millionpassengersPassenger numbers are forecast todouble by 2016

A brief historyExeter Airport has a historystretching back to the 1930s whenit was first developed by ExeterCity Council. Some 187 acres wereacquired by a compulsorypurchase order in 1935 for £10,470.The airport played an importantrole in the defence of the southwest during the Second World War,acting as the base for both the RAF,including a Polish squadron, andlater for the US Army Air Force.Continuing this link, every summerthe famous RAF Red Arrows teamuses Exeter International Airport asthe most regularly used airfieldfrom which to take their fantasticaerial displays to locations aroundthe South West.

BALFOUR Beatty has succeeded in getting through tothe next round of the BAA framework. At stake issome £10 billion of work over the next ten years. Themajor prize is the new £1.8 billion Heathrow EastTerminal project, which will replace the existingTerminal 2. The next stage is to conclude financialnegotiations. Balfour Beatty are currently producingproposals for projects in Terminal 1 including: Pier 4alterations (£9 million), arrivals and departuresrefurbishment (£35 million) and the FlightConnections Centre (£5 million).

The company put up an excellent performanceover the framework process from September 2006 to

March 2007. The following Operating Companieshave all had to demonstrate their capabilities: BalfourBeatty Construction, Balfour Kilpatrick, BalfourBeatty Management, Balfour Beatty Civils, Mansell,Haden Young and assistance from Balfour Beatty Rail.

The selection process has involved statements ofexperience, an extensive review of Group capabilityincluding nine supplier evalutaion visits, threeexamplar projects proposals and finally a commercialsubmission. Balfour Beatty has had a relationship withBAA going back to 1995. Currently work is nearingcompletion on Terminal 5, and continues at GlasgowAirport and on the Civils Framework Contract.

In January, Balfour Beatty’s specialist airport investment and development group Regional and City Airports (RCA) completed the £60 million purchase of Exeter International Airport

in Devon. One of the UK’s fastest-growing regional airports, and home of the RAF Red Arrows, it offers significant opportunities for further development

An artist’s impression of theExeter International Airport

The RAF Red Arrows: Exeter International Airport is the airfieldthey use most regularly when in theSouth West

A Flybe aircraft refuels at Exeter International Airport

£10 billion at stake in BAA framework

Centex acquisition 15US projects14

THE Group took a big step forward in its planto become a major domestic player in theUS infrastructure market on 2 April when it

completed the acquisition of Centex Construction,a high-quality, top tier US building company basedin Dallas, Texas, with annual revenues which, thisyear, will exceed $2 billion.

The acquisition creates a profitable criticalmass in the US in a core Balfour Beatty businessand brings with it substantial new businessopportunities.

The map overleaf, shows the CentexConstruction core footprint with its heavyconcentration on Texas, Dallas in particular,Florida, North Carolina and Washington DC.

It is also a leading player in the privatisedmilitary housing market where it has recently wonan order for the US Navy worth over $525 millionto add to an impressive existing portfolio. Itspecialises in the construction management anddelivery of institutional and commercial buildings,particularly in the education, healthcare,correctional, government, transportation, leisureand office sectors.

The deal will allow its former parent company,Centex Corporation, to concentrate entirely on itsleading housebuilding business.

Announcing the acquistion to the City, IanTyler, Chief Executive, explained that Centex offers

Balfour Beatty an excellent position in US growthmarkets, with approximately US$5.6 billion ofsecured and committed orders.

The company seeks to be a leader in multiplemarket sectors, but concentrates its efforts in anarrow geographical arena. It serves a wide rangeof blue-chip customers such as the FederalGovernment, Disney Corporation, BostonProperties, Marriott, Bank of America and a rangeof education authorities and healthcareorganisations.

Balfour Beatty has paid its owner, CentexCorporation, $362 million for the business,although the net purchase price is significantly lessas Centex Construction brings over $200 million ofpositive cash bank balances with it.

As well as its excellent market position,Centex’s management style, its key philosophiesand processes and the way it thinks about its futureis highly Balfour Beatty compatible. Like BalfourBeatty, Centex has a decentralised structure and asophisticated risk management system. It has astrong bias towards long-term customerrelationships and proven processes in supply chainmanagement and strong cash management. It alsohas an experienced and highly successfulmanagement team, which has achieved significantgrowth in the business over recent years.

Fitting acquisition

It was this fit that was particularly attractive toBalfour Beatty. We know our UK business still hasplenty of growth potential but we have to acceptthat sooner or later this room to grow may be morerestricted. To keep growing, we need to establishstrong businesses outside the UK, and the US isour most important target market.

Centex Construction will complement Heery,Balfour Beatty’s existing presence in the USbuilding market. Heery is involved in upstreamplanning and programme management, whileCentex provides a powerful delivery capability.

The two companies will continue to operate

ONE GIANT LEAP

Under construction: Capitol visitorcentre, one of many prestigious projects Centex hascompleted in Washington DC

The acquisition of Centex Construction makes Balfour Beatty amajor player in the US. Update takes a close look at the company

and its achievements

▼Jackson International Airport

THE Cotton Bowl in Dallas, Texas, one of the mostfamous stadiums in the United States, is to be given amulti-million dollar facelift by Heery International.

Work began in January on the project thatincludes adding another 16,000 seats to accommo-date more fans. The first phase of the $45 millioncontract is scheduled to be completed in Septemberand the second phase 12 months later.

The City of Dallas awarded Heery Internationalthe design and build contract. Heery was able toengage its colleagues at Charter Builders, a construc-tion firm acquired by Heery in 2006, creating asingle-source solution for the project responding tothe accelerated project schedule and its complexity.

As well as increasing capacity at the stadium, theplanned facelift should help improve amenities for thefans and generate additional revenue. The workincludes the exterior façade, concourse and point ofsale areas, the provision of state-of-the-art technologyand better facilities for the teams and the media.

“The end result will be a facility that combinesthe best of the past, present and future for Dallas resi-dents and sports fans across the nation,” said RobChomiak, Heery International’s Cotton Bowl projectexecutive.

The annual Oklahoma-Texas college footballgame is played at the Cotton Bowl during the TexasState Fair. A number of historic music concerts havebeen held at the stadium, perhaps the most famousbeing the one which featured the 21-year-old ElvisPresley on October 11 1956. U2 have appearedthere and Eric Clapton organised a huge bluesfestival. The stadium, which opened in 1932, wasfeatured in a 1981 episode of Dallas where JREwing met Dusty Farlow.

Heery International has worked on more than 45collegiate football stadiums and 225 sports facilities acrossthe United States. “We’re excited to be working on suchan historic landmark,” added Mike Holleman, Director ofSports Facilities.

WORK is on track on theGreenbush rail project inMassachusetts, US for theservice to be launched later thisyear. The design and buildcontract is being carried out bythe Jay Cashman Inc andBalfour Beatty Construction Inc

joint venture on behalf of theMassachusetts BayTransportation Authority torestore a commuter rail serviceknown as the Greenbushcorridor that runs through thetowns of Braintree, Weymouth,Hingham, Cohasset and Scituate.

A forest of scaffolding surrounds theRoseville treatment plant project

The Cotton Bowl, scene of college football matches, historic concerts featuring such stars as Elvis Presleyand Eric Clapton

JV opens up theGreenbush corridor

Historic stadium tunes in to facelift contract

WORK to nearly double capacity at thewater treatment plant that serves the city ofRoseville in California is running anamazing four months ahead of schedule.And that’s because it hasn’t gone with abang!

Balfour Beatty Infrastructure Inc’sproject team, which is carrying out the $32million scheme, is justifiably proud of itsachievement. “We staffed up early on,developed alternatives for the excavationplan and worked with the City Council tomove the project forward, comments ProjectManager Chris Rutherford.

Site excavation was one area where theteam was able to gain several weeks on thetwo-year schedule. While the plans calledfor blasting in all areas of the site, the teamdiscovered through exploratory drilling thatconventional excavation equipment could beused on 95 per cent of the site. That savedtime and money.

Senior Vice-President and West RegionManager Bill Ogle credits teamwork and theexcellent working relationships that havebeen established with the City authorities.“We’ve kept them up to speed on everyaspect of the project,” he adds.

The project, which is due forcompletion at the end of this year, involves a40 million gallons a day expansion of thetreatment plant, which takes water from thenearly Folsom Lake, together with theprovision of reinforced concretesedimentation basins and filters.

Rosevilleraces throughthe schedule

16 17Centex acquisition Centex acquisition

as separate entities under theirexisting managements but weexpect there will be significantopportunity for Heery to workwith Centex in future.

At the same time, Centex’sstrong presence in statemarkets where a PPP market isdeveloping creates thepotential for a powerful,integrated offer to helpaccelerate the development ofCentex, Heery and BalfourBeatty Capital’s PPP business,based in Atlanta.

With the transactioncompleted, CentexConstruction has changed itsname to Balfour BeattyConstruction Llc.

The existing US civilengineering business, whichwas previously called BalfourBeatty Construction haschanged its name to BalfourBeatty Infrastructure Inc.Balfour Beatty Rail Inc isunaffected by the transaction.

The scope of theoperations in the US isillustrated in the chart below.

CENTEX FAST FACTS

CENTEX Construction has beena leader in the commercialconstruction industry for morethan 70 years. It provides generalcontracting, at-risk constructionmanagement, design-build, precon-struction and turnkey services.

The company grew through theacquisition and consolidation ofseveral of the nation’s oldest andbest known regional constructionfirms and has operated as CentexConstruction since January 2005.

The national head office is inDallas, Texas. Divisional headquar-ters are located in Charlotte, NorthCarolina; Fort Lauderdale, Floridaand Fairfax, Virginia. Additionaloffices are based at Atlanta,Georgia; Fort Myers, Florida; FortWorth, Texas; Miami Florida;Nashville, Tennessee; Orlando,Florida; Raleigh, North Carolina;West Palm Beach Florida.

The company currently has overUS$4 billion in active contractsand over US$5 billion incommitted backlog.

80% of projects are with repeatclients.

Number of employees 1,400+ .

Winner of 14 National EagleAwards for Excellence inConstruction since 1995.

Supports these and other localcharities and community organisa-tions.

March of Dimes WalkAmericaHabitat for HumanityUnited WayChildren's Medical CenterHearts and HammersRonald McDonald HouseGive the Kids the WorldRichardson Regional Cancer

CenterCenter for Multicultural

Human Services

PROJECT PROFILELIKE Balfour Beatty, CentexConstruction delivers a wide variety ofcommercial construction projects toserve its clients in both the public andthe private sectorsDuring the seventies, eighties andnineties, Centex built some of the mostrecognisable landmark buildingsthroughout the United States. These include:

Boston City Hall

Texas Stadium, home of the Dallas

Cowboys

Dallas Museum of Art

Cinderella’s Castle and hotels and

resorts at Walt Disney World

Orlando International Airport

Hyatt Regency Hotel.

In 2003, the company was chosen tobuild the Pentagon Memorial tohonour the victims of the 9/11 terroristattack in Washington DC. Thefollowing year, the magnificentCentex-built Gaylord Texan Resort andConvention centre opened. From thegourmet restaurants to the 2.5 acreclimate controlled atrium and replicaof the Alamo, this Texas-sized resort isalready a landmark and a legend.

In 2006, the Air Force Memorial andthe National Museum of the MarineCorps were publicly dedicated by thePresident of the United States.

BUILDING BETTER COMMUNITIESLIKE Balfour Beatty, Centex has an active community campaign aimed at putting something backinto the communities where it works. Whether it is paintball championships, cake bakes, fightnights in aid of cancer, marathon running or volunteering, employees are keen to raise funds for arange of local charities and community organisations including

March of Dimes, WalkAmerica, Habitat for Humanity, United Way, Children’s Medical centre,Hearts and Hammers, Ronald McDonald House, Give Kids the World, Richardson RegionalCancer centre, and the centre for Multicultural Human Services.

In Florida, the Baker centre replacement school project was the first project to start reconstruc-tion after Hurricane Charlie destroyed numerous schools in 2004, so it was very important for thechildren to be part of this event. Pete Garcia led the kids in a rendition of ‘Bob the Builder’ to getthings started.

Looking to develop smart students, for the past five years Centex has hosted the Math Chal-lenge barbecue at a local elementary school as a reward to those pupils who achieve maths goalsset by their teachers.

5%

67%

15%

13%

Balfour Beatty US revenues (projected)

c.$3.5bnUS approximately 23% of

total Group revenues going forward

Centex Construction (now BalfourBeatty Construction)

Balfour Beatty Infrastructure

Balfour Beatty Rail

Heery

▼

Above, the extraordinary Gaylord TexanResort and Convention Center andbelow, the opening of the NationalMuseum of the Marine Corps byPresident George W. Bush

Military housingThe US Military Housing Programme involves privatecompanies financing builds and maintaining married statusaccommodation on US bases across the company. Centexpartners with GMH, a leading developer and financier, andhas won many substantial schemes including contracts forthe Navy, and work for the world famous US militaryacademy at West Point.

Texas$500m revenues. Over 70 active projects

Order book of $500m Average contract value of $15m Education, commercial and healthcare focus Based in Dallas Key customers

Hines, UT System, Children’s Medical Center, Texas Health Resources

Washington, DC $400m revenues. Over 20 active projects Order book $600m Average contract value $43m Government and transportation focus Based in Fairfax (Virginia) Key customers include

General Services Administration, Boston Properties, Dulles Airport

Southeast $600m revenues. 90 active projects Order book of $250m Average contract value of $21m Education, commercial, corporate Based in Charlotte Key customers include

University of North Carolina, North Carolina State University, Marriott, Bank of America, GMH Military Housing

Florida $600m revenues. Over 50 active

projects Order book $800m Average contract value $25m Education, government, criminal

justice focus Based in Fort Lauderdale + 6

satellites Key customers Disney, Hogan,

County School Boards

Left, barbecue mumshand out theburgers. Right, Bobthe Builder getsthings started at theBaker centre

18 19Centex acquisition US projects

UPDATE: Why was such a successful businessas Centex Construction available for sale?

RVC: The CEO of Centex Corporation, ourprevious owner, is a 35-year homebuildingveteran and his vision of Centex overall involvesstrategic simplification around a single corebusiness. Centex Corporation is mostcomfortable with a business model whichinvolves higher risks and higher rewards than ourbusiness offers. In addition, the current climatewithin the US homebuilding market put them in aposition where raising cash became a highpriority. And so, when Balfour Beatty approachedthem, they were ready to talk.

UPDATE: How did you feel when you knewBalfour Beatty was interested?

RVC: Flattered that we are an attractive target.But, of course, the prospect of change also breedsuncertainty and that uncertainty is exacerbated ifa change to foreign ownership is involved. So,naturally there was some anxiety. I have to say,however, that we got comfortable with the ideavery quickly. We liked your senior people rightaway. Their in-depth knowledge of our businessand ongoing enthusiasm for the deal have beenvery positive motivators for our team.

UPDATE: What are Centex Construction’s key characteristics?

RVC: We are, like Balfour Beatty, verydecentralized, with four strong regionalbusinesses, one of which has a military housingdivision. There are some core principles, however,that bind us together as a business. We are veryperformance driven and people are heldaccountable – but we are also a very caringcompany – looking out for our fellow workersand playing a full and positive part in thecommunities where we live and work.

We have a single creed – based on the tenetsof Service, Talent and Choices. This creed servesas a common foundation for our business andreminds us of who we are as a company and asindividuals.

UPDATE: How does the divisional structure work?

RVC: We believe that customers need to be‘owned’ locally and looked after by people whomthey know and are dedicated to meeting theirneeds over time. It is in such relationships that wefeel we add the most value to our clients.Therefore, each of our divisions is focused onwhat we call ‘going deep’ within a particulargeographic market, or in the case of our militaryhousing and corporate accounts teams, withspecific long-term key clients.

All of our divisions have a common objective

of working with customers on a long-termrelationship basis. In fact, 95% of our work isprocured on a qualification – not price – basis,which means that the customer needs to be fullyaware of and comfortable with our capabilitiesand resources. Our decentralized divisionstructure, therefore, places a great deal ofemphasis on both the quality of our people andthe relevance of their local expertise and attentionto client service.

UPDATE: How do your customers regard you?

RVC: I believe they see us as transparent, honest,and always with a focus on their best interests asa driver in all that we do. It may sound overlynoble, but we truly want them to see us as beingmore interested in solving their problems than ourown. In that way, we reinforce our continual goalof earning their trust. They see our value –including quality – and as a result are prepared torecognize and reward that value with theircontinued business.

UPDATE: What impressions have you formed ofBalfour Beatty in the lead up to the deal beingcompleted?

RVC: Like us, I see transparency, honesty and akeen interest in the truth whether it is good newsor bad. Also, I see a great deal of humility. Wehaven’t seen a lot of chest-beating and boastingby the Balfour Beatty team, but instead, alwaysobserve a quiet confidence and competence,which immediately earned our respect. Inaddition, we see in all of the people we’ve met agreat business sense and a continual focus onoperational success, always with a well-thoughtout and clearly defined strategy. And to top it alloff, they are just really bright people who wereally enjoy working with.

UPDATE: What are your ambitions for yourbusiness now that it is part of the Balfour BeattyGroup?

RVC: I would like for our existing business toachieve the success we have targeted regardingperformance excellence, employee engagement,and customer delight. In addition, I want BalfourBeatty to be as proud of us as it already is of itsmost successful businesses. I want us to be assupportive of the Balfour Beatty brand as any ofthe existing businesses. I would like ouremployees to feel that they are a key part of theBalfour Beatty Group. And finally, I’d like ourbusiness to be a contributor in finding andcapitalizing upon any synergies that may existbetween the Balfour Beatty businesses.

UPDATE: Can you tell us a bit about yourself?

RVC: I was born and educated in Texas and,although I have worked elsewhere in the UnitedStates, Texas is my home. I have a house aboutfive miles from the office and live the urban life,but travel a lot, particularly to our divisionoffices.

My wife, Sharon, has put up with me for 25years, which is a credit to her, and together, wehave a 16-year-old-son, Braxton, and a 10-year-old daughter, Bailey.

I’ve spent 25 years in the commercialconstruction industry, the first 15 years for ClarkConstruction Group, one of our key competitorsin the industry. At Clark, I worked my way upthrough operations and preconstruction,completing my time with them as a Senior VicePresident on a large $245 million project inPensacola, Florida.

Eleven years ago, I joined Centex in Dallasand since then, have been working with mycolleagues to create the business as it is today. Ishare my excitement in the future with all 1,400 ofour employees. Together, we are all feeling verypositive about this change and are looking forwardto being a part of the Balfour Beatty team.

Our aim: to be a key part of Group

Robert Van Cleave: “I share the excitementof my 1,400 colleagues in the future.”

Centex Chairman and Chief Executive Officer, Robert Van Cleave, spoke to Update about his company and the acquisition

At three miles long and 26-feet wide ithas to be said that the ProvidenceCombined Sewer Overflow (CSO)

tunnel is one heck of a hole in the ground.It is also part of an amazing subter-

ranean solution to an annual problemcreated by Mother Nature. The completionof the $172m project on March 1 means thatsome of Rhode Island’s prettiest Atlanticcoastline will be safeguarded against one ofthe major sources of pollution.

For several years heavy seasonal stormscreated flows that exceeded the capacity ofthe regional drainage andsewerage system, which servesProvidence, the capital ofRhode Island, known as theOcean State.

At times more than twobillion gallons of overflowinguntreated water and sewagecould be released into thecoastal Narragansett Bay andthe rivers which feed it, theBlackstone, Moshassuck,Providence, Seekonk,Woonasquatucket and WestRivers.

According to Bill Ogle,Balfour Beatty Infrastructure,

Inc. Vice President, “This is the sixth andclearly the most technically challengingunderground project that the Shank-Balfour Beatty team has successfullycompleted in a relationship which spansnearly fifteen years. We look forward tosimilar success on the recently awardedDorchester CSO project in Boston, Massa-chusetts.”

Construction of the Providence CSOtunnel project was provided by the jointventure with tunnelling specialists M. L.Shank Company, Inc. who worked together

to upgrade the sewerage system for theNarragansett Bay Commission.

In simple terms, the storm-surge solu-tion involved the construction of a storagetunnel, 26 feet in diameter and 16,215 feetin length, that during periods of heavy rain-fall could retain the large volume of excesssewage and water for subsequent treatment.

After extensive evaluation by the RhodeIsland Department of EnvironmentalManagement of the environmental benefitsand impacts of the proposed undergroundstorage scheme as well as alternatives, it was

adjudged “the most environmen-tally sound, as well as cost-effec-tive, means to control CSOdischarges,”

Apart from the huge CSOtunnel, the project also involvedexcavating a 60’ x 60’ x 120’ rockcavern. Four work shafts up to 50feet wide had to be bored down300 feet into the ground. Overallthere were 4,100 feet of drill andblast connecting adits.While most people in Providencewill never see this project, whencompleted it will have an imme-diate impact on the quality ofwater in the area.

From new interstate highways to utility water-courses the work of Balfour Beatty Infrastructure, Inc. and itsassociates in the US often underpins the daily life of millions of Americans. Some engineering triumphs –like the Providence CSO Tunnel – will forever lie unseen underground, so we thought you’d like to see....

...A HOLE LOTTA WORK

Alliance Rail20 21

A BALFOUR Beatty/Carillion joint venture has won a£363 million contract by Transport for London (TfL) tocreate the new East London rail line between DalstonJunction in the North and New Cross in the south.

The works are part of a major investmentprogramme by TfL to open London’s first purpose-built metro rail service – London Overground – intime for the 2012 London Olympics.

The joint venture will act as main works contractorfor phase one of the contract. Scheduled for completionin mid 2010, this covers the extension of the existingEast London Line northwards from Shoreditch toDalston Junction and conversion of the Whitechapel toNew Cross section to Overground operation.

As well as track, signalling, telecommunicationsand electrification, the contract encompasses major

civil engineering works including the construction ofnew stations at Hoxton, Haggerston, Dalston Junctionand Shoreditch High Street; a new depot at New CrossGate; plus the construction of major new bridges.

The first is an 84m long girder bridge which willspan the six track approach of the Great Eastern mainline to Liverpool Street Station.

The bridge will be installed on a 30% skew andinclined to the natural grade from Whitechapel toShoreditch.

The second is a bridge across Shoreditch HighStreet at its busy intersection with Bethnal Green Road,leading immediately to Holywell Viaduct which willcurve through almost 90 degrees as it swingsnorthwards running parallel to the A10, KingslandRoad.

BALFOUR Beatty Rail’s first project in Chile –the construction of trackwork for lines 4 and4A on the Santiago Metro – has beenshortlisted in the International Performancecategory of the 2007 Quality in Construction(QIC) Awards, which will be announced inMarch.

The £41 million Santiago Metro project washugely successful and was completed on timeand to budget despite a number of unusualaspects. These included managing a 2,500-strong workforce from 15 nationalities, theadministration of a local joint venture partnerand working to an accelerated timescale.

Importantly, the new metro lines have madea significant contribution to social inclusion inSantiago, enabling access to the city in around 20minutes.

Now in its eleventh year, the prestigious QICAwards are run by trade publication ConstructionNews and are highly regarded within the industry.

A team from Balfour Beatty Rail was invited tomake a presentation to a panel of four judges. And

according to John Latham, Balfour Beatty RailInternational Operations Director and formerBalfour Beatty Rail Project Director on the SantiagoMetro project, the team was determined to dosomething different.

“We had just 15 minutes for our presentation and25 minutes for Q&A ,” he says.

“Instead of using the predictable and stilted

Powerpoint-type presentation we wantedto surprise and capture the imagination ofthe judges. So we used 100% graphics orphotos on our slides and each had to learnour lines. This meant several rehearsals toget word-perfect but it was good fun.”

The team also had the brainwave offilming a testimonial by the BritishAmbassador in Santiago, Howard Drake,who was delighted to help out.

“It was very theatrical and included anod to televised award ceremonies whenduring the presentation we announced‘sorry he can’t be here in person’ and then

ran the film clip. The judges seemed quiteamused.”

Balfour Beatty Rail is up against PellFrischmann for Highway 2000 in Jamaica, and AlNaboodah Laing O’Rourke for the Mall of theEmirates Snow Centre.

“It would be nice to win,” says John Latham.“The team worked extremely hard to successfullydeliver the project.”

JV wins new East London line

New Santiago Metro lines enable access to the city in 20 minutes

Metro makes a mark in awards shortlist

Taking collaboration to new heightsPartnering with clients is tried and tested forsharing risk and increasing efficiency on long-term contracts. But how about partnering withpotential competitors? Strange as it might seem,that’s exactly how National Grid’s new ElectricityAlliance contracts work.

Last October Balfour Beatty Power Networks inconjunction with Balfour Beatty Management wereidentified as preferred partners by National Grid forthe upgrade of high voltage overhead lines andunderground cables in the eastern half of Englandover the next five years and beyond.

Branded the Electricity Alliance East, thecontract is one of two overhead line and four sub-station alliances split on a geographic basis in one ofthe largest procurement exercises undertaken byNational Grid, representing a capital investment inthe UK electricity network of around £2.8billion.

And, according to Kevin George, AllianceManager for the Eastern contract, which becameoperational in April, the alliance contracts arealready producing unheard-of levels of collaborationnot only between contractor and client but betweenall alliance partners. This extends to the embeddingof alliance staff in the National Grid AssetManagement Team as well as National Grid staffbeing integrated with each alliance.

“The idea is to build long-term workingrelationships so that we can all share the risks aswell as the rewards,” he says. “Alliance partnershipsenable better financial planning, visibility ofworkload, and improved safety performance. Theyremove the uncertainty for the client and free up thepartners from having to bid annually for individualproject contracts.

“It was a new experience to have regular

meetings with the other five alliance managers toensure we have a consistent approach, and the moodis genuinely upbeat. It’s been a really exciting time.We’re working collaboratively to ensure we can allbe successful.”

“We started out with an East/West split butalready we’ve been given some work from the WestAlliance and we’ve given them some projects inreturn,” adds Kevin.

Balfour Beatty has proven experience of suchpartnerships, being two years into an eight-yearalliance contract with National Grid which covers gasmains replacement in the North West of England.

“Clearly this helped us,” says Kevin, “butNational Grid was also attracted by the fact that ourbid was put together by two of Balfour Beatty’soperating companies which opens up access to amuch wider potential resource right across theGroup. Due to increased work volumes, we nowexpect to deliver around £700 million of overheadline and underground cable improvements over theinitial five year period rather than the £550millionoriginally anticipated.”

“And the option to extend the contract for afurther five years following a regulatory review in2012 means we are now working on a 10-yearbusiness plan.”

At the end of February the contracts were

signed, the Electricity Alliances were officiallylaunched, and the mobilisation phase of the projectbegan to prepare for the official start on 1 April.

“There’s a perception that Balfour Beatty hashad it easy compared to other alliance partnersoperating as joint ventures,” says Kevin. “But inreality knitting together the technical andengineering expertise of Balfour Beatty PowerNetworks transmission and cabling divisions withthe operations, safety and commercial managementresources of Balfour Beatty Management has been areal challenge. However, we now present a seamlessinterface to the client.”

“With the bulk of our resource located withinBalfour Beatty Power Networks in Derby andNational Grid being based in Warwick, we decidedto site our headquarters instead at Rugby, roughlyhalfway between the two. This ensured that we stooda chance of attracting equal interest from both parentcompanies.”

Kevin is excited by the unique opportunities theAlliance presents for personal growth anddevelopment.

“Everyone who works for the ElectricityAlliance East from within Balfour Beatty willremain an employee of their parent company andwill retain their current employment conditions,” hesays. “However, there are fantastic possibilities toreally broaden skills and experience. One area wherewe do need extra resources is design. We need togrow our design resource rapidly and I am nowlooking for structural and civil designers from acrossthe Balfour Beatty Group,” says Kevin.

Anyone who is interested in joining Kevin andhis team should contact Iain Logie in the HumanResouces team at Balfour Beatty Power Networks.

“The idea is to build long-termworking relationships so that we can

all share the risks as well as therewards”

High wire: a Balfour Beatty PowerNetworks worker upgrades high voltagelines

THE European Commission has giventhe green light to the UK railsignalling joint venture of BalfourBeatty and Alstom, the French engi-neering group.

It has ruled that the joint venture,Signalling Solutions, which willsupply rail signalling projects andequipment, would not significantlyimpede effective competition in theEuropean Economic Area.

Since receiving EU clearanceManaging Director David Felton andhis team have been progressing certainformalities that need to be finalisedbefore Signalling Solutions can beginoperations.

The new company has been set upas a 50-50 joint venture betweenBalfour Beatty Rail Projects andAlstom Transport Information Solu-tions UK to offer turnkey solutions fortrain control and resignalling projectsfrom conceptual design to fulldelivery.

The services it can provide tocustomers range from early feasibilitystudies, design, implementation anddelivery, to product supply, trainingand after sales support.

EU signalsokay to jointventure

FIVE months may not be a long time, but forKevin Craven, who only became MD of HadenBuilding Management Limited (HBML) in

November, it is long enough to know he has joined acompany with a great future.

“Haden Building Management Limited has atremendous reputation for service delivery and I havebeen very impressed with the professionalism andcompetence of everyone I’ve met so far,” he says.

“The company has a heritage in engineeringexcellence stretching back 190 years. We’re nowaiming to develop the same levels of excellenceacross a broad range of services and I’m confidentthat we can develop the resources and infrastructureto deliver this.”

Born and educated in Zimbabwe, Kevinoriginally trained as an engineer although hisbackground is in catering management. Beforejoining HBML, Kevin was Managing Director ofSpecialist Markets at Aramark, the internationalsupport services and facilities management group,with responsibility for the education, healthcare,custodial and defence sectors.

Kevin has certainly joined the company at a verybusy time. Last December the company was awardeda seven-year, £150 million contract by theMetropolitan Police Authority to provide facilitiesmanagement services across 500 properties in NorthLondon including landmark buildings such as thePeel Centre in Hendon.

As well as providing building engineering andfabric maintenance services, the contract includes thedelivery of such services as cleaning and laundry,waste management, grounds maintenance, receptionand porters. The contract goes live on 28 April.

“Winning a contract of this length andcomplexity is a testament to our reputation forinnovation,” says Kevin. “It’s a clear example of ourstrategy to build long-term, sustainable customer

relationships and follows on from the work we aredoing for the Department for Work and Pensions(DWP).”

Awarded in September 2006, the seven-year,£320million DWP contract saw HBML selected asthe single source supplier to deliver a comprehensivepackage of support services on a nationwide basis.This builds on a relationship with DWP that goesback to 1995.

“What’s interesting about this contract is thatwe’re not following our normal model in taking careof the client’s physical assets, we’re also looking aftera whole raft of business support services such astyping, reprographics, and telephony. This frees theclient to focus on their core business. It changes thebusiness model completely,” says Kevin.

Since 1 March, when the project went live,HBML has 2,500 new employees nationwide, takingits total workforce to around 13,000 – a 23%increase.

Kevin points out that with both the DWP and theMetropolitan Police contracts, the IT team has takenon a more active role in developing and presentingthe bids.

“We’ve also had to develop the capacity toachieve BS27001, which covers data security, aswe’re being asked to handle highly sensitive clientinformation. This whole experience will proveinvaluable as the Government continues to outsourcecontracts.”

Another area where HBML has built up enormousexpertise and experience is in the delivery of servicesas part of Balfour Beatty’s successful PFI projects inthe education, healthcare and transport sectors.

One of the very first hospitals delivered under theGovernment’s PFI programme was Edinburgh RoyalInfirmary, where HBML is delivering all facilitiesmanagement and non-clinical services under a 30-year agreement.

Other major PFI projects include UniversityHospital of North Durham, Blackburn RoyalInfirmary, 115 schools in Stoke on Trent, 14 schools inRotherham, and four major Inland Revenue sites in thenorth of England and Scotland.

About 20% of HBML’s current business comes viathese PFI projects and Balfour Beatty Capital hasconsequently become a key client as well as being afellow operating company.

HBML’s other important long-term frameworkcontracts are delivered via two joint venture companies– Monteray and Romec. Monteray Ltd was set up in2000 to manage 8,500 BT facilities. Romec isresponsible for the maintenance of 2,500 Royal Mailbuildings.

“These joint ventures represented a significantchange for Haden Building Management Limited,”says Kevin. “They have enabled us to build upvaluable capabilities in business partnerships outsidethe normal subcontract relationship.”

HBML is in a good position to capitalise on itscommercial success and strive for further growththanks to a strategic review conducted in 2005.

This prompted a major restructure of the company,which now has three administrative offices based inSidcup, Gateshead and Bristol. The majority of other

staff is located at client sites. Additionally, operationsteams were reorganised into business streams whichbroadly face client sectors.

One other significant change is the reorganisationof the engineering field force which has beentransformed into a mobile self-sufficient workforcemanaged by former HBML Technical Director, AlanMarchbank. Regional service centres have beenreplaced with an administrative and despatch centre inBirmingham and all engineers now receive daily workschedules via hand-held PDAs.

“This is the way of the future,” says Kevin, “withcritical engineering tasks supported on site butroutine and preventative maintenance supplied bymobile field force. Our smaller contracts with clientssuch as Sainsbury’s are almost exclusively supportedthis way.”

So what does the immediate future hold?Kevin is excited about a couple of potential high

profile projects. HBML/Balfour Beatty Capital are onthe shortlist to construct the new PFI Tyne Tunnelcrossing and manage toll operations. The company isalso bidding with Balfour Kilpatrick for a large BritishEnergy lifetime contract for their total nuclear powerfacilities.

“Our key challenge is to be one of the top threefacilities management providers in the UK by 2015,”says Kevin. “And there’s no question that winninghuge long-term contracts will fuel our organic growth.Our skills and experience in extending the life of anasset over time obviously matter but clients are alsoimpressed with our commitment.

“For instance the director who led the bid for theMetropolitan Police contract will become the AccountDirector of the project as it goes forward. Clients likethat sort of continuity and accountability. I believe ourexpertise and commitment combined with the backingof the Balfour Beatty Group will help us achieve ourstrategic goal.”

The Haden name:History & Heritage

1772: Britain’s most innovative engineer,James Watt, enters into a partnershipwith Mathew Boulton at the Sohofoundry in Birmingham where heperfects his steam engine. The foremanof the machine shop is one GeorgeHaden.

1816: George Haden’s sons start theirown company in Trowbridge, Wiltshire.

1825: Haden provides warm-airventilation systems to many of the statelyhomes in England, including WindsorCastle.

Early 1900s: Haden becomes one of thelargest heating and ventilation companiesin Britain

1986: Haden joins the Balfour BeattyGroup

1998: Company divides into HadenYoung, specialising in commissioningand installing M&E systems, and HadenBuilding Management Limited,specialising in facilities management.

2006: Haden Building ManagementLimited is a leading UK asset andfacilities management business withannual revenues of around £250million.

Haden Building Management Limited is poisedfor significant growth after a

series of major long-term contract awards.

Update caught up with newlyappointed Managing Director Kevin Craven to find out what

lies behind this success.

Taking care of business

Interview Interview22 23

“Our key challenge is to beone of the top three facilitiesmanagement providers in the

UK by 2015”

– Kevin Craven

Innovation 24 Innovation 25

FROM The Ridgeway, Great Britain’s oldesthighway, high up on the Berkshire Downs,you can see the future – an innovatory

‘super microscope’ called The DiamondSynchrotron.

The size of five football pitches and thelargest UK-funded scientific facility to be builtfor over 30 years, the Synchrotron, or DiamondLight Source, is not only a world-leadingscientific facility that will host up to 40 cutting-edge research stations. It also provides a tangibleexample of 21st century construction techniques.

While beams of exceptionally bright lightfrom the Diamond Synchrotron will enablescientists and engineers to see deep into the basicstructure of matter and help push back theboundaries of Man’s knowledge, the veryexistence of this futuristic facility has beenunderpinned by innovative mechanical andelectrical (M&E) services work carried out byBalfour Beatty operating company Haden Young.

Using the latest modularisation techniques,Haden Young provided (M&E) services tosupport the sophisticated instrumentation thatresearchers from the UK and abroad will use asthey access the Diamond Light Source at theHarwell Science and Innovation Campus.

The essential circular doughnut-shape of theSynchrotron meant that all the 90 half-tonservices modules had to be precision-made. Eachmodule was bespoke-built with requirementssuch as four-degree angles on joints and extremetolerance specifications, to provide cooling andother services in support of the various Diamondbeamline research workstations.

All the modules were pre-built off-site usingHaden Young’s extensive off-site buildingservices manufacturing experience. Thecompany has recently opened two state-of-the-artmodularisation centres at West Bromwich andRochdale. Each provides clean, bright,uncluttered and undercover working conditionsfor construction of the units – one of the keys tothe success of modularisation.

“These factory standard conditions allowus to maintain top quality standards, minimise

waste, integrate services work with other constructiontrades and eliminate many of the on-site health andsafety risks. The result is that we can get complexprojects on the fast-track and achieve customerobjectives,” said Tim Waldram, Marketing Manager ofHaden Young.

Using modularisation on complex installationssuch as hospitals where M&E can account for around40% of £500m-plus projects has helped drastically cutsite installation times. Traffic and storage problemsassociated with materials deliveries to site are alsosignificantly reduced.

Addenbrooke’s Hospital in Cambridge, Queen’sHospital in Romford, Churchill Hospital in Oxfordand University Hospitals Birmingham have allbenefited from Haden Young’s innovativemodularisation.

“We regard ourselves as at the forefront ofbuilding services modularisaton in the UK, if notEurope, having some time ago taken the strategicdecision to introduce off-site pre-construction to helpmeet the needs of our clients. The process proveditself at our Bristol centre and we have now extendedour capability and include it from Day One whentendering for almost all of our larger contracts,” Timadded.

Putting all those pipes, cables and heating ductsinto modularised units also helps when pitching fornew contracts, says Tim. “It certainly does give you anedge with the larger projects such as PFI work andthose with demanding timescales. Doingmodularisation in-house means we can continuallyimprove efficiency and it also promotes furtherinnovation, but you do have to ensure that there arestrong lines of communication between the site andthe manufacturing teams.”

“We have been doing a lot of things reasonably successfully for some time, but now we have got to start thinking more laterally. It will be business-threatening if we do not innovate.”

Addenbrooke’s Hospital units in position

Manufacture of module units

Delivery at Addenbrooke’s Hospital

Pre-fabricated units ready for use

GROUP Managing Director Brian Osborne,who is responsible for five UK operatingcompanies of Balfour Beatty plc and threeinternational businesses, has only ever workedwithin the construction industry.

With 34 years’ knowledge and experienceof Balfour Beatty, he recently concluded:

“We have been doing a lot of thingsreasonably successfully for some time, but nowwe have got to start thinking more laterally. Itwill be business-threatening if we do notinnovate.

“Innovation has always been important butnow it is vital in any bid for work.

“If we don’t do this, others will and ourclients will go elsewhere. Showing innovation isnot now a ‘nice-to-have’, it is essential.”

About a year ago Brian Osborne instigateda companywide Innovation Forum, drawingtogether Business Improvement Managersfrom operating companies to ensure that goodideas were nurtured and brought to fruition asworking procedures and best practice.

Many of those ideas are now increasinglybeing used within the Group, says Brian, to win

▼

▼

BOB Hughes, the Innovation Manager forBalfour Kilpatrick, agrees that

modularisation is a key industry innovation –but the industry needs more to help solve theoverall skills shortage. Modularisation allowsrapid ‘bite-size’ production training ofindividuals, whose work and standards can beeasily checked.

“The key to innovation is the use oftechnology, but anyone can have a good idea.We need to establish a culture where people arehappy to put their head above the parapet andput forward their suggestions.”

That’s one reason Bob has formedInnovation teams throughout his eastern regiondrawing members from all sections anddisciplines. “To really make a difference youneed to involve all parts of the business.

“More and more clients are asking whatinnovation you can bring to the table. In thepast 3-4 years in the building sector the need toshow innovation has really been snowballing. ”

Bob is no stranger to innovation. Whilewith MEPC Solutions he won The Innovation ofthe Year Award for a fast, accurate computersoftware package that converts 2-D drawingsand technical specifications into a viewable 3-D‘virtual’ building, complete with costings andconstruction brief. “It’s a pitch-winninginnovation that I aim to introduce for use inBalfour Kilpatrick very soon.”

“Innovation hasalways been

important but now itis vital in any bid forwork. If we don’t dothis, others will andour clients will go

elsewhere. Showinginnovation is not now

a ‘nice-to-have’, it is essential.”– Brian Osborne

contracts, satisfy clients and to make BalfourBeatty a more potent professional operationwith a brighter future.

Apart from the off-site manufacturing ofmodules, he cites innovation such as BalfourBeatty Infrastructure Services’ one-man cone-laying machine; the use of stop-tap by-passvalves and vacuum excavation within BalfourBeatty Utilities; the auditing and benchmarkingof innovation by Gammon Construction;development of alternative energy projects byMansell and Balfour Kilpatrick; and even theintroduction of HR incentives such as TheChairman’s Prize for graduates, as examplesof how Balfour Beatty is already integratinginnovation within its operations.

“We need to continue to shake off the oldshackles, and get used to winning workthrough our ideas, rather than through ourprice or past performance.

“While satisfying our client, we also needto satisfy ourselves that we are fully tappinginto the ideas that our people have and thatwe are sharing knowledge and innovationwithin the company,” he added.

INNOVATE OR DIE

Pre-fabricated modules are just part of themechanical and electrical work being done

by Haden Young at the giant curved structure of the Diamond Synchrotron

Roads Road26 27

BALFOUR Beatty Civil Engineering (BBCEL) has commenced siteclearance on the £371 million A3 Hindhead road improvementscheme in Surrey following government approval for this scheme.

This is an ambitious project, as it involves building a 1.9km twin bore tunnel.As Paul Hoyland, Project Director, BBCEL says, “This is quite a feat as thereare very few tunnels this length being built in the UK. Our job is to build thescheme, make sure there is minimum impact on the environment and to keepthe traffic flowing.”

The project involves moving the Hindhead section of the A3 east toavoid the town and running it underground through the tunnels and thenclosing the old A3 across Hindhead Common.

The Highways Agency appointed BBCEL after a competitive qualityprice bid. BBCEL succeeded in beating four others to win it. “Our trackrecord got us through the first hurdle onto the bidding list,” says Paul, “butthe key was our quality submission – how we would manage the risk, partic-ularly the tunnel, how we would address community issues and how wewould care for the environmentduring the entire process. We alsohave experience of constructing thistype of tunnel for the HighwaysAgency.”

The project, which is expected tobe completed in 2012, with the tunnelopening in 2011, will speed up thejourney between Portsmouth toLondon by up to 30 minutes at peaktimes. As things stand, there is severe congestion at the Hindhead trafficlights. As Paul explains, “We are taking the existing A3 out of a protectedarea and putting it into a tunnel. We’re uniting the two halves of HindheadCommon – an area of outstanding natural beauty.”

One of the reasons Balfour Beatty won the contract is its ability to workwith people at all levels. As Paul says, “We put forward a strong team – notonly from Balfour Beatty, but also our designer Mott MacDonald. Part of thetender scoring for the contract was the presentation we gave to the ProjectAdvisory Group where we explained how we would work with keystakeholders. We demonstrated that we have the systems, methodology,experience and people in place to carry out a job as extensive as this.”

Another major factor in winning the business was BBCEL’s ability toshow how it would manage the environmental issues – especially as theDevil’s Punch Bowl is a site of Special Scientific Interest (SSSI) and aSpecial Protection Area (SPA).

As Ian Whyte, community relations manager, BBCEL, says, “We hadecological and landscaping consultants working with us on this from thestart. Surveys and preparation work were carried out to help us minimise the

THE FIRST full-scale SafeTcone machine will be tested in April after fouryears of research and development. This follows an initial trial of a proto-type research machine on the Highways Agency network during lastsummer.

The machine lays cones automatically, which not only reduces the timetaken to set out and remove roadworks, but also improves safety for road-workers.

Once trials have been completed, the first production machine will bepart of the Area 3 fleet of traffic management vehicles. This is the BalfourBeatty Infrastructure Services (BBIS) contract for the Highways Agency’sstrategic roads centred on Hampshire, including parts of Surrey, Berkshire

and Wiltshire. The secondproduction machine isexpected in June this year andwill be allocated to Area 2 –the InterRoute JV contract (JVbetween BBIS and MottMacDonald) for the HighwaysAgency’s strategic roadsaround Bristol and thesurrounding counties.

John Findlay, director,BBIS, says, “We had beenconsidering automated conelaying and retrieval for someyears, but when award-winning inventor Brian Flynnapproached us with an experi-mental machine, we could seeit had enormous potential. Thetranslation from inventive ideato operating model has onlytaken place because of thefaith and support that BBIShas given throughout its devel-opment.”

SafeTcone is the only machine that can automatically stack cones forstorage and retrieve them when required. John says, “The first productionmachine will store some 900 cones in stacks of 30 cones – the saving onmanual handling for production staff is considerable.”

BBIS has demonstrated its support of innovation and invested over£200,000 in the original prototype and the first production machine, as wellin kind support through the provision of production staff and engineers.

All BBIS staff using SafeTcone have been fully trained and as Johnsays, “they have all been very enthusiastic about its introduction.”

UPDATE takes a look at one of Balfour Beatty Infrastructure Services’newest local authority highways contracts, with Essex County Council,

as it notches up its first year of operation. Employees working for Balfour Beatty Infrastructure Services’ Essex

highways term maintenance contract must find their jobs almost unrecognis-able from 12 months ago.

The company took over the £23.5m a year contract for the mid andeastern parts of the county in April 2006, in a complicated process which,because of new geographical boundaries for the contract, saw staff joiningfrom five different organisations.

Then, nine months into the contract, the company re-branded from RCSto Balfour Beatty Infrastructure Services.

The new contract has had to increase efficiency without stinting onquality, following a shift to a unit cost way of working.

Bringing the A3 community on board

impact the scheme may have on the environment.We consulted environmental bodies to determinethe right precautions to protect the environmentduring construction.”

Although the contract was won in 2002, it has

taken several years to develop the scheme and get tothe construction stage. Currently the site is beingcleared but this will take until the end of the year.Paul explains, “As this is during the dormousehibernation period, we had to obtain a speciallicence from the Department of Environment, Foodand Rural Affairs to enable us to cut down the treesto a certain level – so when the dormice wake upthey will move out to adjacent trees and then we canremove the tree roots. Once the bird nesting seasonstarts, we will have to stop site clearance until theseason is over, as they are legally protected.”

How is Balfour Beatty Engineering workingwith the community? Ian says, “We have to develop

good working relations with everyone associatedwith the scheme including councillors, local busi-nesses, landowners, schools and local authorities.”

One of the most successful ways of doing thiswas holding a two-day public exhibition in Januarythis year. A 28 panel exhibition, wide screen visuali-sation and a model of the scheme were on display atGrayshott Village Hall in Surrey. “Everyoneinvolved in the project was there and so people hadan opportunity to ask questions,” says Ian. “We hadto open an hour early because people were queuingin the street – over 2,500 people attended during thetwo days which I think is a bit of a record. It washighly successful.”

SafeTcone machines lay outanother line of cones during tests

SafeTcone looks good in trials

“We have divided the contract into three opera-tional teams, two working on routine maintenance andthe third on major schemes,” explains ContractManager Sean Miles.

“The client was sceptical at first, but we knewfrom previous experience that it would work, and nowthe council is exceptionally pleased with this system.Our people have coped extraordinarily well with allthese changes to their working lives, and have beenvery focused. It’s great to see how committed staff areat all levels to the company, and to providing the clientwith a genuinely first-class service.”

The contract, taking in a mainly rural area butalso some large towns like Colchester, Chelmsford

and Braintree, has performed consistently well fromthe outset. Miles believes that several factors havecontributed to this success.

“As the ‘new kids on the block’, we have workedhard to build up a relationship of trust and under-standing with the client.

“We took the lead in developing Key Perfor-mance Indicators with the county council, and theclient copied our style of monthly contract reports inthe west and south of Essex, where a competitormanages the county roads.”

The success of the contract over the first year hasbeen helped by the involvement of staff at all levels inworking groups. Three such groups are already well-

established on the contract, looking at how to usevehicles, PPE and tools more efficiently, and theirefforts will continue.

But there are fresh challenges ahead. For example,we have been tasked by the client to bring Essex’snetwork of unclassified roads up to scratch. And Milesis keen for his team to be in a strong position when thetime comes, in 2009, for the client to ponder the firstin a series of potentially unlimited extensions.

“We’re a strong, successful team, which isdown to the hard work of everyone, and there is somuch left we can do in Essex. There is no reasonwhy we shouldn’t be on the county’s roads for a longtime to come.”

One year on: taking the lead on Essex roads

Grayshott Village Hall, where a two-daypublic exhibition drew over 2,500 people.Below, an artist’s impression of theapproach to the tunnels

“We’re unitingthe two halves of

Hindhead Common– an area of

outstanding naturalbeauty.”

Schools28 Schools 29

LLLLeeeeaaaaddddiiiinnnngggg oooonnnn lllleeeeaaaarrrrnnnniiiinnnnggggTRANSFORM Schools competed against

nine companies to become the preferredbidder of Knowsley Metropolitan Borough

Council in Merseyside for the £157 million PPPconcession to construct seven new learning centres.Under the Building Schools for the Future (BSF)programme, the innovative learning centres willreplace all of the Borough’s secondary schools overa three year period.

The concession, which is for 25 years, isexpected to reach financial close in May. Work isscheduled to begin in July with the first learningcentre expected to be a new joint-faith school innorth Huyton, replacing St Edmund of Canterbury.The last learning centre will be built in 2010.

This represents a huge achievement forTransform Schools because, initially, it was upagainst stiff competition for the contract. This wasthen whittled down to three in the final stage, withTransform Schools beating Spirel (Amec) and KeyStage Solutions (Alfred McAlpine).

Tony Wilson, Bid Manager, Balfour BeattyCapital, says, “We kept education at the top of theagenda whereas the other operators focused onarchitecture and engineering. Our understanding ofthe Council’s vision for education enabled us to winby a healthy margin. Knowsley Council saw thatwe could be trusted to assist them with the bigchange management issues that will go hand inhand with such a transformational agenda.”

Knowsley Council’s vision is to deliver aproject-based approach where students studythemes that cut across subject disciplines in additionto the more focused studies in traditional schools.Tony explains, “The learning centres will benothing like an existing school – they’re not evencalled schools. We have minimised the areadedicated solely to circulation and in doing so haveremoved the long corridors with classrooms on eachside. This saving in area has been invested in yeargroup bases – called Home Bases – which providelarge spaces into which learning can break out ofthe classroom.”

The learning centres will be for the wholecommunity. They will be open from 7am to 10pmyear-round and most weekends. “We have proposedvarious training and apprenticeship schemes whichcan be held at the centres,” says Tony.

A key to Transform Schools’ success wasincluding the best examples of education fromaround the world in its proposals. Tony Wilsonhimself has 14 years’ teaching managementexperience. Professor Stephen Heppell was also animportant member of the bid team. A leadingeducationalist, he works with governments aroundthe world on innovative forms of education. “Hehelped us understand how we could create physicalspaces that would help the client to realise theirambitions,” Tony said.

Tony said he went on a worldwide tour of schools,recommended by Professor Heppell, to research notonly the design and building of their centres, but alsohow they had introduced new ways of learning toteachers and young people. These included ReeceHigh School in Tasmania, TK Park in Bangkok,Thailand, the Australian School of Science andMathematics in Adelaide and Hellerup School inCopenhagen, Denmark.

FOOTBALL Action, one of the latest initiatives inBalfour Beatty’s work in local communities, was

officially launched last December by Richard Caborn,Sports Minister, at Holden Lane High School andSpecialist Sports College, Stoke-on-Trent.

Football Action is a social inclusion projectthat uses football as a vehicle to reduce vandalism,crime and truancy on school sites in Stoke-on-Trent. As Richard Lloyd, Community FootballDevelopment, Stoke City Council says, “It also

Knowsley, Merseyside

Stoke-on-Trent

Manchester

provides exercise for school-age children, improveshealth and well-being and gives young people, whootherwise may not have it, the opportunity to playfootball.”

The scheme is being introduced at 30 schools inthe city. It is a joint initiative funded by BalfourBeatty which is contributing £90,000 (£30,000 perannum over three years), Sportsmatch £52,000 andthe Football Foundation £172,418 over four years.

At the launch, Richard Caborn MP said,“Football Action is using sport as a medium to bringthese people back into the community and that iswhat it is all about. It costs around £100,000 a yearto keep one kid in sheltered accommodation, andthat doesn’t include the cost of the trail of disaster hemay have left behind. Where sport has beenembraced, you see truancy go down, expulsions godown and the schools play a much bigger part in thecommunity.”

And it works. Helen Wills, Director of Operationsat Transform Schools, says, “Vandalism has reduced

month by month and year on year, which helps sustainStoke Schools as buildings in which children andyoung people want to learn and achieve.”

In the context of additional security measures,statistics show that in January 2006 vandalism wascalculated at 116 incidents and by January 2007 thisnumber had fallen to 74 incidents – a reduction ofaround 36%. In January 2006 the number ofwindows broken was 176, in January 2007 it was 82– a dramatic drop.

At each school, children at risk from socialexclusion, identified by agencies such as the localcommunity police, are offered the chance to takepart in football. Crucially, these sessions take placeafter school – when most vandalism is known tooccur.

Lynn Harvey, communications manager, BalfourBeatty, says, “We build and maintain the schools inStoke-on-Trent and so it is in our interests to make surethat vandalism is reduced. This is an excellent initiativeand one we are proud to be associated with.”

THE first group of 12 apprentices has almostcompleted the training course at Manchester’s

first learning hub, funded by Balfour BeattyConstruction Northern, which opened lastNovember.

Through the hub, Balfour BeattyConstruction Northern aims to increase thenumber of people entering the constructionindustry, as well as improving the skills of existingworkers.

Currently located on the Newall Green HighSchool site in Wythenshawe, it is not onlyproviding training for new entrants to theconstruction industry, but also on-site skillstraining for construction workers. The hub hasbeen developed in partnership with ManchesterCity Council (MCC) and the Manchester Collegeof Arts and Technology (MANCAT) as part of theManchester Schools Framework. Training coursesare being provided by MANCAT and trainees arerecruited through MANCAT’s current waiting list.

Tony Ellender, training manager, BalfourBeatty Construction, says, “The hub will assistwith training of any age. It is being used forschool pupils in the 14 to 16 age groups forvocational training in a site setting, forapprenticeship schemes and for improving theskills of existing site workers. All the workers onthe Newall Green High School site can come herefor a skills profile. We can identify what skillsthey need and then supply the training. Theadvantage is they don’t have to leave the project toget the training.”

A wide range of courses is being offeredincluding bricklaying and apprenticeships inconstruction.

“The hub is encouraging new people to jointhe industry,” says Tony. “People in the area willlearn new skills – it will create new jobs. As anapprentice comes out of the hub, we’ll link themup with a sub-contractor so they can find a job.”

The hub has a ten year life span and it isanticipated that it will offer on-site skills trainingfor up to 600 construction workers over thatperiod. It is a demountable facility which will bemoved up to four times across the city.

Richard Caborn MP, Sports Minister joins in atthe Stoke-on-Trent Football Action launch.

On the level: one to one teaching atManchester’s first learning hub.

“We kept education at the top of theagenda whereas the other operators

focused on architecture andengineering. Our understanding of theCouncil’s vision for education enabled

us to win by a healthy margin.”– Tony Wilson, Bid Manager,

Balfour Beatty Capital

Heritage30 Heritage 31

Labours of loveFEW projects throw up as many unexpected

challenges and demand such swift innovativesolutions as those surrounding restoration work on

the UK’s many historical treasures. Whether thesestructures are of major architectural importance, religioussignificance or historical value, such conservation andrestoration projects also excite the greatest dedication anddevotion in the project teams who work on them.

In the past year, Balfour Beatty operating companieshave repeatedly proved their teams have the necessarysensitivity and resourcefulness to win and successfullycarry out these prestigious jobs.

One such project, which was completed in March2007, took place in and around Liverpool’s vast AnglicanCathedral. Designed by renowned architect Sir GilesGilbert Scott and completed in 1978, the towering gothicstructure is the UK’s largest Anglican cathedral and isconsidered one of the country’s greatest 20th Centurybuildings. Great care and skill were therefore needed toconvert the side-chapels into a mezzanine café and shop,as well as constructing a visitor centre extension onto themain building.

According to Henry Curtis, Mansell Northwest’sBusiness Development Manager, Mansell’s bid wasselected in large part because of their track record withsimilar sensitive projects and their ability to meet thevarious challenges of doing so. “Mansell Northwest hasdone a large amount of work on listed buildings,including schemes for the National Trust and LiverpoolCity Council,” he said.

“Part of this project involved installing a mezzanine –a structure within a side chapel on the left hand side of thenave. We built a new floor, which is fully aproned, with acafé on top and a bookshop below. When putting togetherthe technical bid we formulated several initiatives in termsof getting materials in and out, which was one of themajor challenges. The steel structure is a substantial pieceof engineering, but we found that it would all have to bedelivered into the cathedral through a single window.There are very few removable windows in the cathedral,and since it is a listed monument we obviously couldn’tcut new windows in the fabric of the structure.”

While the cathedral is a relatively modern building itstill needs to be treated sensitively, particularly given thepresence of the UK’s second largest pipe organ in the

choir. Once again, it was down to the ingenuity of theproject team to adapt their methods to the challenge, asHenry Curtis explained. “The air quality in the cathedralwas a big issue; we were going to create a great deal ofdust which could have been very damaging to the organ.The team therefore came up with the solution of usingnegative-pressure. The works area – which was about fiveper cent of the cathedral area – was shrouded in a tentwith air being pulled into that space. Any dust that wascreated within it was therefore held in the space, where itcould be collected and removed. It has been done before,but this was the first time we had used it on heritageschemes and it worked very effectively.”

Similar challenges arose duringanother restoration project this time inLondon. For more than 1,300 years,Fulham Palace estate has been thecountry retreat of Christian bishops, andwas the main residence of the Bishops ofLondon for almost 200 years. Vacated bythe Bishops in 1975, the Palace nowserves as a visitor attraction, hospitalityvenue and exclusive office space.

Large parts of the structure wererecently found to be in a parlous state ofrepair and restoration work wascommissioned with the help of theHeritage Lottery Fund. The proposedfirst stage of the project incorporated thecomplete replacement and restoration of the roof andassociated brickwork at high level and a historicalrestoration of the famously ornate Bishop Sherlock Room,which involved joinery, hand-carving plus lime andfibrous plaster restoration. The ornate carving worksrequired were undertaken in California by a British mastercarver and his team. In addition, it was necessary to bringthe building up to modern standards, both electrically andmechanically, without impacting on its aesthetic beauty. A250 metre auger bore drainage system from the Palace toFulham Palace Road was also required, the longest inEurope.

Once again, Mansell’s winning formula of attention todetail and track record of innovation helped secure the bid.Liam Duffy, Mansell’s Divisional Managing Director,explained how the project quickly became a labour of

love. “We were not the cheapest bid, but during the tenderprocess we visited the site as a bid team, and right then Ifell in love with the project – I make no bones about that,”he said. “There are a number of reasons why we weresuccessful: I believe we provided demonstrable experienceof working in a very sensitive environment, carrying outcomplex restoration processes in a sympathetic manner.Additionally elements of the Palace remained occupiedand this was an extremely important issue for the clientteam, which was catered for in our technical submission.”

These capabilities were put to the test duringexcavation operations, when several historical remainswere discovered. Such finds require a great deal of

flexibility on the part of the project team,explained Liam. “During the course ofthese works we found some verysensitive remains dating back centuries.Consequently, we had to cease work incertain areas to allow the archaeologiststo move in. The extent of the dig was, inthe end, far more extensive than anyonehad envisaged but, because we are acollaborative contractor, we were able towork with the employer and their team tore-sequence our programme andminimise the delays.”

Avoiding damage to the old anddelicate structures during the projectproved another major challenge. Before

work began on the Bishop Sherlock Room, a large sectionof the original ornate ceiling fell down. The team thereforehad to introduce a birdcage scaffold, complete with atemporary support structure to catch additional fallingelements. They were then requested to restore the ceilingto its former glory as a genuine work of art.

The team’s commitment and dedication paid off, andthey were personally thanked by the Bishop of London atthe opening of the restored Bishop Sherlock Room inNovember 2006. The team were still able to add one finaltouch, however, as Liam explained, “Once the work hadbeen completed, the Bishop Sherlock Room still lacked achandelier because there were insufficient funds available.Our team therefore sought the support of some of ourspecialists, and together we contributed to the provision ofa new chandelier, which finished that element off nicely.”

IN the nautical world there are few morefamous sailing ships than the legendaryCutty Sark – the 17th Century tea clipperwhich ranked among the fastest ships ofits age. Now standing in dry dock inGreenwich, the ship is one of the lastsurviving examples of its kind, and stillincorporates 90% of the original iron andtimber hull fabric with which it was firstbuilt.

A 1998 survey of the ship suggestedthat if nothing were done to conserve itsstructure it would become unsafe withinapproximately ten years, as the wroughtiron was actively corroding. To ensure thesurvival of the ship it was thereforedeemed essential that work to conservethe structure began before 2008. BalfourBeatty’s building and development groupHeery were among those who bid to leadthe conservation project, and additionalwork to improve support of the ship, raiseit by about a metre, and install visitorfacilities in the dry dock.

Heery’s Regional Director, KevinTurvey, recalled the winning combinationof experience and enthusiasm. “Heery hasa significant track record with Heritageand Arts projects, so that attracted theclient’s attention in the first place,” hesaid. “We needed to prove to the clientthat we could exercise the necessarysensitivity – obviously a head-down, bull-at-a-gate approach wasn’t appropriate.After the bid, the client was very compli-mentary about the quality of the team andthe way we seemed prepared to engagewith their own people and the designteam.”

The project is now well under way, inclose co-operation with the existingconservation team, as is the constructionof a temporary visitor centre on the site toreduce the short-term impact on revenue.With a fair wind, it seems likely that thenewly-restored Cutty Sark will beenchanting visitors again before the endof 2008.

Balfour Beatty’s commitment toexcellence shines through inthree major heritage projects

With

kin

d pe

rmis

sion

of

Live

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l Ang

lican

Cat

hedr

al

Cutty Sark: tea clipper

Heery makes her ship shape

‘’We were not the

cheapest bid, but during

the tender process we

visited the site as a bid

team, and right then I

fell in love with the

project – I make no

bones about that

Left, the new Mezzanine skilfully adapted to Liverpool’s vast Anglican Cathedral. Above, anotable staircase at Lambeth Palace A fully restored Lambeth Palace, main residence of the Bishops of London for almost 200 years.

Highlights32

WORK to widen a 10-mile stretch of theM1 motorway between junctions 6A and

10 is a project that’s important for the future –and the past.

Alongside the £300 million scheme toincrease both carriageways to four lanes torelieve congestion and improve safety on one ofthe busiest stretches of motorway in thecountry, carrying 160,000 vehicles a day, anarchaeological dig is taking place to save thehistoric artefacts that are being uncoveredduring the construction work.

It is planned to display the finds, whichhave come from the Bronze Age, Roman andmedieval times, at exhibitions in Redbourn andSt Albans. A series of newsletters that focus onthe archaeological work being carried out alongthe length of the motorway improvements willalso be published.

The road improvements, which are beingcarried out by a Balfour Beatty Skanska jointventure, began in March last year on the sectionbetween the M25 and Luton junctions, are dueto be completed in the autumn of next year.

A key element of the M1 scheme is a wide-ranging community relations programme ofmeetings to ensure that residents, local councils,landowners, farmers (especially at harvesttime), the Post Office and the emergencyservices are kept fully up-to-date with progressevery step of the way. News bulletins are alsobeing emailed to local councils to be posted ontheir web sites.

“It is important to make sure that contact ismade before any work begins so that we have

the opportunity to working together to solveany issues that might arise,” said KieranMcGibbon, Engineering and Design Manager.

He pointed out that the company has agreat track record of working on majormotorway projects, including the design andconstruction of a succession of the UK’s majormotorway widening schemes. In most recentyears these have included the £97.4 millionwidening of the M25 Junctions 8-10, the £144million widening of the M25 Junctions 12-15and Heathrow Spur Road.

“Our success is down to the quality of ourpeople, from senior management to junior sitesupervisors. From whatever angle you look atit, we’ve got strength in depth and this ispositively valued by our clients,” he said.

Their experience of working on suchschemes is also paying off in the effectivenessof the community in actionprogramme which is anintegral part of the M1 project.A good example of this wasthe demolition of the Slip EndBridge. As well as alertinglocal residents well in advanceof when the work was to takeplace, 27,000 leaflets,translated into three languages,were distributed throughout thecountry, including motorwayservice stations and the portsof Dover, Folkestone andPortsmouth. And thoseresidents living close to the

bridge were offered overnight accommodationfor the night the bridge was demolished.

The work being done by the team with localschools includes making presentations,producing posters that can be used as teachingaids - and even selling raffle tickets.

Taking good care of the local communitiesincludes ensuring that the road works don’tgenerate too much dust during the summermonths. Water collected from the site is beingtreated and used to keep the dust down.

When the project reached 500,000 manhours worked without any time being lostthrough injury, a cheque for £500 was presentedto Air Ambulance which has been adopted asthe project charity.

Because this is a major project which willcontinue for another eighteen months, Updatewill report on its progress in the next issue.

Past: The old bridge is demolished

Bridging past and future

Future: the new bridge takes shape