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Sat August 08 2020

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Fix fix fix is better than Build build build, says Balfour Beatty boss

2 Jul Balfour Beatty chief executive Leo Quinn says the government would be better advised increasing spending on infrastructure maintenance than headline-grabbing new-build projects.

Balfour Beatty group chief executive Leo Quinn
Balfour Beatty group chief executive Leo Quinn

Maintenance and repair work comes on stream much more quickly and so provides a more immediate boost to the economy, he says.

Earlier this week prime minister Boris Johnson said he wanted to ‘build build build’ to get the economy moving. But Leo Quinn suggests that a smarter choice would be ‘fix fix fix’.

The Balfour Beatty group chief executive has put his name to a 5,000-word essay, titled Seize the day, produced with the help of his public affairs team, setting out his views on how best the construction industry can support national economic recovery after the coronavirus lockdown.

Much of it is familiar stuff. In broad terms it echoes all those saying that we need more innovation in construction and more prefabrication. It warns that clients continually trying to drive prices down are only ultimately serving to increase costs. “Too many still focus on driving the price down below what it costs to build schemes. So risk is mispriced, which means that projects become bogged down in costly disputes and drawn out legal battles that both sides lose. Perversely, obsessively driving down cost bumps up the final price,” the essay says.

However, the call for government to increase the priority it puts on infrastructure maintenance, to increase maintenance budgets, is quite specific.  

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Leo Quinn and his team say: “Government and others should bear in mind that, while new schemes can have long lead times, vital upgrades, renewal and maintenance of existing assets can be much quicker to implement because gaining approval for them is usually much less complicated. These schemes are just as successful at pump-priming local economies across the regions and local communities of the UK and often have supply chains already in place which can be quickly scaled up.

“In the UK, new infrastructure adds only 0.5% a year to the value of existing assets . And yet it is often given significantly more prominence than maintenance when annual budgets are set. Given the importance of our existing roads, railways, bridges and power stations, and the need to ensure that they are emitting as few carbon emissions as possible and are also resilient to the impacts of climate change, we believe that ongoing maintenance, with adequately resourced, ring-fenced funding, should be bumped up the priority list. It amounts to ensuring the safety of those using the assets and to protecting our investments by getting the maximum value from assets. It is also the best, most cost-effective way of doing so. Planned, funded maintenance programmes offer the best opportunity to develop and preserve the skilled workforce necessary to keep our infrastructure in peak condition, enabling the development of innovation, driving productivity and keeping costs down – there are few areas of life where prevention is not better, and cheaper, than cure.”

The document also reveals where Balfour Beatty’s business development teams are going to be focusing their attention in the months ahead. There will be no capital spending at UK airports for a while yet, Balfour Beatty says, but other sectors are also in for a slowdown:

“There may be an impact on the amount of student accommodation needed in the medium-term as universities move quickly to develop their virtual offer. Schemes in the retail, leisure and hospitality sectors are likely to be reconsidered or redesigned, while investment in distribution centres, warehouses, factories may increase.”

A Balfour Beatty spokesperson later clarified that the Leo Quinn was in no way advocating any reduction or downgrading of new build.

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