EC Harris spies opportunity for second-tier contractors

Property consultancy EC Harris has called upon second-tier contractors to get involved with multi-million pound mixed-use regeneration schemes, as the cost of the projects rises due to lack of competition.

The firm’s development expert Peter Lakin pointed out that the regeneration of cities was being driven by increasingly complex schemes of £80m and above, which only four or five major contractors would take on.

Second-tier contractors were unwilling to take the risks involved in working on large-scale projects, he said.

He criticised the government’s lack of appreciation for the pressure being put on the supply chain for developments, saying: "The public sector’s intentions for our towns and cities are highly laudable, however the lack of joined-up thinking in their approach is leading to an over-heating of the market place."

Lakin said each city was desperate for early wins in their regeneration strategy, leading to increasing pressure when bidding for sites, which was resulting in higher costs and inefficiency.

He suggested that the need for developers to sign up to ambitious timescales could create the ideal opportunity for second tier contractors, and suggested a collaborative approach.

"The inherent risks of large mixed-use projects have historically been a barrier to entry to relatively smaller contractors. However, the risk can be significanctly reduced if the parties within the supply chain adopt a collaborative approach," he said.