Public sector keeps construction ticking

New Labour's promise to invest heavily in the renewal of Britain's creaking public infrastructure could not have come at a better time for construction.

As the graph below shows, the last three years have seen a steady decline in the volume of private sector work, pretty much in line with prevailing economic conditions. Private commercial orders have shrunk by £2bn since 2000 to £6.5bn, while private industrial orders have halved in value to just over £600m.

By contrast, there has been steady growth in the public sector. Infrastructure work has grown from just £3.3bn to more than £5bn in 2002 - and much, much more is on the way this year. London Underground's PPP work should start to come through once financial close is reached on the remaining two deals (Tubelines closed theirs on New Year's Eve).

There's also the small matter of the government's 10-year transport plan, with £33.5bn of public sector money earmarked for rail - in theory. It remains to be seen if Network Rail proves more adept at delivering the promised improvements than Railtrack was. The water sector should also be buoyant.

Housing orders have risen more slowly, though there is likely to be more work on the way in this sector too, with the total backlog of repairs in Britain's social housing estimated at over £20bn. Housing associations formed on the back of several large scale voluntary transfers last year should start putting tender documents out soon. But there is no indication yet that the seemingly interminable Pathfinder PFI process is going to speed up; none of the original eight have reached financial close, and only four are at preferred bidder stage. Nonetheless, the government still regards PFI as a key delivery mechanism for social housing, and approved a further dozen last year.

Other public sector work shot up in 2002, though the year's tally has been distorted slightly by the MoD's SLAM programme, awarded to Bovis Lend Lease last month (see p17).

The usual suspects

The names at the top of the CJ50 table included all the usual suspects; indeed the top four were unchanged from their positions last year. The SLAM award enabled Bovis to pip Carillion to the overall CJ50 award for the second year running.

Among Carillion's most significant wins were two big CTRL awards: the £92m infrastructure maintenance contract for section one in Kent; and the £120m deal to construct the track and overhead line system on section two, from Ebbsfleet to London St Pancras.

Third-placed Kier continued its policy of targeting small, mainly low-risk projects, while Balfour Beatty did particularly well in the water and roads sectors. Balfour, as part of the Metronet consortium, will be looking forward to work starting to roll in on the London Underground during 2003.

Newcomers in the top 10 included Amey, which finished sixth on the back of a series of framework deals from the Highways Agency in early 2002, before the year turned sour for Brian Staples and co. Costain also jumped into the top 10 after a particularly healthy year; the contractor signed a PFI deal with Kent County Council to build two social and health care centres and was selected as a principal supply chain partner for NHS Estates' £300m pilot Procure 21 programme.

Among the other big movers was YJL, which steamed up to 12th after winning a £150m deal with the JNP Infraco on London Underground for the refurbishment of 38 stations on the Northern Line.

Shepherd leapt 11 places to 17th, enjoying a particularly good March, when it was only pipped to the top spot by Amey's tranche of road wins. Rokbuild was another big climber, largely as a result of its acquisition of Llewellyn last summer, which saw the group's turnover effectively double.

New faces at the lower end of the top 50 included Leadbitter, Durkan and Thomas Vale. n