Scots voice cowboy fears - Crane planned to leave C&N 'before losses' - MoD to gauge contractors' views - Wates sees turnover rise 30% to £380m - Wates sees turnover rise 30% to £380m

by Graham Ridout



Scottish contractors are to press ahead with a demand that any registration scheme for builders, which aims to rid the industry of cowboy traders, is made compulsory.

Members of the Scottish Building Employers' Federation met with Scottish MP Henry McLeish last week to reinforce their call for legislation to back the quality mark scheme.

Sid Patten, chief executive of the SBEF, said: "The industry in Scotland is quite clear. We need legislation. There is a vast amount of money wasted rectifying the work of these rogue trades. Therefore, reputable contractors have got to do something that will prevent the rogue traders from getting work.

"Regrettably, legislation is required, with high enough penalties to stop them coming in and out of the industry."

Patten said that although SBEF was pleased with the anti-cowboy builders report by Tony Merricks and the stance taken by the Department of the Environment Transport and the Regions, he believed a voluntary scheme would not work in Scotland. He said: "Doctors and dentists have to be registered by law, why not builders?"

In addition, SBEF is pressing for more recognition of Scotland's construction operatives' registration scheme, SCORE.

Patten said: "There are around 9,000 operatives registered, less than 10% of the total workforce. The scheme needs clients and unions to get behind it."

SCORE is similar to CSCS (the Construction Skills Certification Scheme), which forms a cornerstone in raising the competency of a contractor's workforce. Patten said if the Government's quality mark scheme was to be introduced north of the border, some differences had to be resolved. "CSCS accepts crafts at level two whereas in Scotland we call for craft level three. But I am sure we can reach a solution."

Patten said part of Federation's campaign to raise the profile of competent contractors involved meeting local authorities, senior civil servants and members of the Scottish Parliament to warn them of the dangers of rogue traders. "In nine out of 10 cases, accepting the lowest bid will cost the client more. Lowest tender price does not mean lowest (final) cost."

Patten said SBEF had made an offer to Merricks, while he was compiling his report, that Scotland be used as a pilot to test the efficacy of legislation. He said the offer was still open. by John Leitch



Alan Crane has insisted that losses at contractor Christiani & Nielsen were not the reason for his sudden resignation on 6 June.

C&N finance director Clive Thompson also resigned last week. He will stay with the group as company secretary.

Crane said: "The losses didn't prompt my move to resign. It is something I'd been thinking about for a while - two months in fact. I felt there are better things I can do elsewhere and I'm looking to resurface.

"First, I'm going to relax and will start thinking about what to do later this week - the only thing I'm not going to be is a journalist. I've no share options and no rolling three-year contract, just a decent notice period. I might form a consultancy on my own and yes, I'd be a chief executive if anyone asked."

Thailand-based Santi Grachangnetara, chief executive of C&N's parent company, is taking a closer involvement in the group's international building and civil engineering business, based at Leamington Spa.

UK operations made an operating profit of £2.8m in 1998 from a turnover of £115m. The 1998 accounts recorded debts of £22m on "amounts recoverable on contracts", the figure having risen from £11m from 1997.

Audited figures for 1999 have not been published, but they are expected to show a loss of £8m. The amount recoverable on contracts is expected to move further ahead to £25m. Of the £8m losses in Europe in 1999, £4m is thought to stem from property and mechanical and electrical subsidiaries rather than from mainstream contracting.

A source in Thailand said the parent company was making a loss. After being suspended on the Thai Stock Exchange in 1997 the group has been digging its way out, he said. He said the 200 staff in Thailand resented being told what to do by UK management and had suffered a three-year pay freeze while UK staff enjoyed annual salary increases.

Taking over at C&N are new chief executive Andrew Pearson, and Malcolm Cowling, new finance director. Paul Maclaughlan heads commercial operations. by Kathy Watson



Defence minister Dr Lewis Moonie is planning to hold top-level meetings with the industry to gauge the views of contractors, specialists and consultants in his first major initiative since being given responsibility for prime contracting.

The first will take place on 21 June and those expected to attend include Sir Neville Simms of Carillion, Peter Mason of Amec, plus senior figures from Bovis, Shepherd, Alfred McAlpine, Amey, Building and Property, Mouchel, Aqumen, WS Atkins, Servus, Serco and PricewaterhouseCoopers.

Inside sources say the minister is keen to get industry feedback. One source said: "Change always trigger criticism. We hope people will articulate their concerns so that they can be addressed. The information we get will be fed back into the development of prime contracting."

The mix of attendees has been designed to ensure a balanced response. "We don't want to be listening to just the big contractors," said the source. "The response from clients and the Government is that prime contracting is the right thing to do."

Other breakfast meetings are scheduled to follow in July and August with architects prominent on the invitation lists.

At last week's briefing on the Ministry of Defence's new strategy, Defence Estates' chief executive Ian Andrews admitted that the criticism of prime contracting had been expected and was welcomed as an indication that a sea change is under way.

Asked whether other client sponsors echoed the concerns voiced by Lieutenant Colonel John Thorn that contractors would price for risk thereby reducing value for money gains (CJ 5 April page 1), he said a major education drive would help allay their concerns.

The MoD plans to cut back its 4,000-site estate to core areas by identifying and selling off sites for housing, particularly in the south east. The cash raised from this and from the savings generated through prime contracting will be used to tackle the backlog of maintenance at service bases, barracks and offices.

It also intends to relocate its estate away from the south east and into areas where it recruits most of its personnel, which is likely to mean a switch to the north, Scotland or other areas of high unemployment which in the past have been fertile ground for services recruitment. Turnover at contractor Wates jumped 30% in 1999 to £380m thanks to a strong construction market in London and the south.

"We picked up some good work," said Jonathan Houlton, finance director on Monday (12 June) as Wates unveiled results for the 12 months to 31 December 1999. Pre-tax profit, however, only moved slightly ahead to £7.2m, up on £6.8m in 1998.

Houlton said that while average margins were 1.5-2%, some regions are at 3%. He said Wates' medium-term aim was to get the entire group to this higher figure.

Profits were hit by a £200,000 loss on the sale of Elmore Plant Hire, a subsidiary sold to Hewden Stuart. Also, net interest receivable in 1999 was down as a result of a 2% fall in interest rates since 1998.

In April Wates started its second private finance initiative project. The project, Leyton School in London, has a construction value of £12m. Wates is in a consortium with Innisfree and WS Atkins, and the same combination is bidding for PFI schools contracts in Conwy (capital value £35m) and Newham (£28m).