CJ50 Market data: Skanska excels at school

PDF of market data July 2006

Skanska reclaimed the number one spot from Balfour Beatty in our July CJ50 chart thanks to a busy month in the public sector, which was also the most lucrative sector overall. This pushed the contractor up from 11th place, with more than £175m of forward orders, following a relatively quiet June.

There was plenty of movement elsewhere in the table, with work more evenly distributed between the top 10 contractors in comparison to Balfour Beatty and Taylor Woodrow’s disproportionately large workloads in June. Balfour fell from first to ninth place, while Taywood was well out of the top 10 in 17th position. The overall value of contracts for July was nearly £2.2bn, slightly less than the 12-month average of £2.4bn.

Skanska’s most significant win was the first programme under the government’s Building Schools for the Future initiative, in Bristol. The Local Education Partnership between Bristol City Council, Skanska and Partnerships for Schools will be responsible for developing all medium to large school projects in Bristol during the next 10 years.

The first four schools will be developed via a single PFI project. Skanska will undertake the design and construction contract, worth approximately £120m.

Contractors in the commercial sector also enjoyed steady business, securing nearly £667m of work, up from £432m in June. Second-placed Carillion, a new entrant in July’s table, won a lucrative PFI project for the Ministry of Defence. Along with its 50:50 joint venture partner, HSBC Infrastructure Fund Management, the contractor will redevelop, manage and operate the Northwood headquarters, home of the chief of joint operations.

Carillion will carry out a £150m construction programme over a five-year period and will also provide a wide range of support services, worth in the region of £440m over the contract period.

May Gurney was another successful entrant in third place, with just five civils projects. The largest of these was a £147m five-year highways project for West Sussex County Council. The contract is worth between £20m and £25m annually, and includes a possible extension to 10 years.
Morgan Sindall rose three places to fourth. The group’s Morgan Est infrastructure services arm won the largest scheme, a £65m programme of upgrades, part of Scottish Water’s £1.8bn modernisation scheme of Scotland’s water and sewerage network. The group also secured nearly £60m of commercial work, taking its total haul to £153.5m.

Fifth-placed Bovis Lend Lease moved up three places thanks to  public sector wins. Lend Lease Projects has been appointed by the University of Worcester to project manage its new £97m city campus under a four-year framework deal. In addition, Northumbria Healthcare NHS Trust awarded a £30m contract to a Bovis Lend Lease-led group for a PFI hospital scheme in Hexham.

HBG’s largest project win in July will see it construct the new Caerphilly Local General Hospital at Ystrad Fawr, for Gwent Healthcare NHS Trust. In sixth place, it will provide a new integrated hospital facility with a total floor area of 24,000m2 over a height of four storeys, with a construction cost of £75m.

Galliford Try was the third new entrant to the top 10, taking seventh position with over £131m of work, largely civils. The company has long-term frameworks with most of the UK’s water companies, including Scottish, with which it has agreed an extension  expected to provide another £70m of work over the next two years.

Galliford Try also announced £50m of work for the London Development Agency. Along with Edmund Nuttall, Galliford is delivering the Olympic Park remediation and demolition programme to prepare for the construction of Olympic venues.

In at eight was Kier, down from fourth place in June. Roughly two-thirds of its £124m haul was in civils, with the rest in the commercial sector.
Balfour Beatty, at nine, announced some of the work involved in its 31-year PPP schools concession for South Lanarkshire Council. The firm is to build a £19m college in East Kilbride under the scheme.

The construction of Laing O’Rourke’s £35m A590 High and Low Newton Bypass scheme in Cumbria will start this summer, after the government agreed to plough an extra £13m into the project. The company announced the project in July, which helped it to secure 10th position in the table.