50% bond shock for mechanicals

A client demand for a 50% bond on an œ8 million contract is being cited by engineering construction leaders as an example of the reasons they are reshaping their industry association to take a stronger line on economic and commercial issues.

The Engineering Construction Industry Association was formed nine months ago following a merger of the previous engineering construction and oil and chemical contractor bodies. Both were previously primarily concerned with industrial relations and employment issues.

But chief executive John Porter says the new ECIA is now aiming to become more of a trade association. The first step in this direction has been to establish a commercial and economic committee headed by Ted Murphy, managing director of Caxios.

'The amalgamation of the two bodies to form the ECIA has gone far more smoothly than some of us dared hope,' said Porter. 'And we now have as strong, single voice for our sector.'

Porter added that the newly-created commercial committee will be aiming initially to improve relations with clients and to tackle onerous contractual conditions such as pay-when-paid and unreasonable bond demands.

An early target is the institution of standardised prequalification criteria. The association is also seeking representation on the special working parties formed in the wake of the Latham report.

Porter also added that the ECIA would be interested in joining the revamped Construction Industry Employers Council - although it is waiting to see how this CIEC develops.