IS CONSTRUCTION UNFAIRLY BLAMED WHEN PROJECTS GO WRONG?

Are construction companies an easy target for politicians and the wider public when projects go wrong? Neil Gerrard speaks to Professor David Edwards to find out if the industry is getting a raw deal

First completed section of Curzon 3 viaduct – Birmingham city centre in the background

PIC: HS2

Construction companies are an easy target for politicians and the wider public when projects go wrong and are often unfairly blamed. That’s the view of a built environment professor who holds positions at universities in the UK, Australia, and South Africa.

The comments from David Edwards, professor of plant and machinery management at the UK’s Birmingham City University’s School of Engineering and the Built Environment, come as multiple major contractors have emphasised how they are cutting down on their exposure to riskier projects where they could be held responsible for budget or schedule overruns.

They also coincide with news about delays to high-profile projects, including the Co-op Live arena in Manchester, which saw 14 events involving acts like Olivia Rodrigo and Take That cancelled over several weeks because of overrunning works.

In the US when California’s high-speed train was proposed, the cost was estimated at US$22.8 billion – new cost figures recently issued in an update report from the California High-Speed Rail Authority show that the plan to build the 171-mile initial segment has shot up to a high of $35 billion, exceeding secured funding by $10 billion.

In Australia, the road system known as North East Link is running AU$10 billion (US$6.7 billion) over original estimates; the West Gate Tunnel, first quoted at AU$5.5 billion (US$3.6 billion), is now AU$10.2 billion (US$6.8 billion) and counting. And as for the city Metro Tunnel – the State Government will now have to find at least another AU$1.36 billion (US$910 million).

It emerged recently that the UK government will release another £1 billion (US$1.25 billion) for the delayed and over-budget highspeed railway HS2 to ensure that it reaches its planned central London terminus at Euston, after Prime Minister Rishi Sunak took the controversial decision to cancel the ‘rest of the project’ north of Birmingham in October last year.

Similar stories as these could be recounted from around the world. However, professor Edwards, who is adjunct professor at Nelson Mandela University in Port Elizabeth, South Africa, visiting professor at the University of Johannesburg, and honorary professor at Deakin University in Australia, told International Construction that politicians should avoid making major projects into a “political football”. Construction companies involved in building them did not always deserve the blame when things go wrong, he asserted.

“A lot of the things that are delaying projects at the moment are black swan events. These events are unpredictable – war, the Covid pandemic, and changes to government policy that have to be amended to cope with those dreadful events.

“But it’s all too easy to turn around afterwards and say it was the contractor’s fault. If we look at the gestation period of a contract, often they are negotiated and escalated many years before the works actually start,” he added, highlighting that it can be hard to predict such events and the effect they have on projects.

Meanwhile, clients, particularly those who lack experience in construction, may add changes to the project as it moves along, leaving the contractor to cope with those too, he added.

At the same time, contractors are under increasing pressure to keep costs down.

Work on California's high-speed rail

PIC: CALIFORNIA HIGH-SPEED RAIL AUTHORITY

If you look at some of our competitors, like China, they get projects delivered much more quickly because they have the resources to make a project a success

Professor David Edwards

“Many of the contractors I work with are taking low margins on their projects. There’s a misconception in society that construction companies bid low and inflate the price once works start but it’s not strictly true (often changes are due to, among other things, client requests) nor really reflective of the professionalism of the people working in our sector and doing a tremendous job under difficult and dynamic circumstances,” says Edwards who, unusually for an academic, started his career as a bricklayer.

Infrastructure ‘for national good’

He argues that countries in the West needed to become better at agreeing what infrastructure and other projects are in the national interest and then offering them their full support. “We have to move away from these political footballs and move towards asking what is in the national interest,” he said.

“We have to have good infrastructure. We need to try to preserve the environment as best we can but to move businesses forward and create the wealth, jobs and healthcare that everyone wants. We need effective infrastructure to modernise our country and keep us competitive globally.

“If you look at some of our competitors, like China, they get projects delivered much more quickly because they have the resources to make a project a success. They have learned a lot over the years and made many mistakes enroute but there’s a lot to be said for projects having full political and national support,” he added.

The professor asserts that situations like the Ukraine war and the post-pandemic supply chain crisis had highlighted just how critical heavy industry and infrastructure, and consequently construction, are to western economies like the UK.

Cost and schedule overruns

Nonetheless, Edwards said there were strategies that construction companies could adopt to get better at identifying potential sources of delay over cost overruns before they arise.

“I would say this as a professor but one of the things we can do is run systems theory analytics in a business to trace through the pinch points that occur – that will lead to the answers to some of these problems,” he said.

“At the client brief stage, you need to make sure that the client is fully on board with the ramifications of everything that goes forward.”

Clients also have a role to play, specifically when it comes to making sure that contractors aren’t being squeezed too hard on price, he said.

However, he cautiones that, “With black swan events, I don’t think anyone has really developed any form of model that can predict certain things happening, whether it is force majeure, war, or Covid.

“These sorts of events are very difficult. What we can do is build more resilience into the early estimate but with all the pressure to keep costs down, we are not really achieving that.”

Edwards did concede that the informal nature of the construction market also allows less reputable companies to proliferate and that having a well-recognised certification scheme for companies to show a minimum standard of conformity and competence would also help to improve the industry’s image.