Skanska enjoys a healthy May

PDF of market data May 2006

The biggest-ever single healthcare PFI was awarded in May, making other public non-housing by far the most lucrative sector in the CJ50 table.
The Skanska Innisfree consortium secured a £1bn project for Barts and the London NHS Trust to redevelop Barts Hospital and the Royal London Hospital. This pushed Skanska from ninth place in April to an easy lead in May.

The project is also the largest ever secured by Skanska and includes the design, construction, operation and maintenance of the hospitals, as well as investment and participation in the consortium of owners that will operate the hospitals during the 38-year concession period.

Barts Hospital, which first opened in 1123, will become a Cancer and Cardiac Centre of Excellence. Most clinical services will be based in a new eight-storey facility. The new cancer centre is due to be open in 2010, with the cardiac centre set to be operational in 2016.

The Royal London Hospital, which dates back to 1740 and has been on its Whitechapel site since 1757, will be largely rebuilt. Most clinical services will be housed in a new 18-storey building expected to be complete in 2012 in time for the Olympic Games. Other elements of the hospital are due to be finished in 2016.

Skanska also secured a £75m contract to construct the next office building at Paddington Central for Development Securities. Funded by Morley Fund Management and Deutsche Immobilien Fonds, the project, known as One Kingdom Street, involves the design and construction of a 12-storey building featuring a long-span steel frame and concrete composite decks. Completion is scheduled for January 2008.

No other contractor in the table could boast anywhere near Skanska’s total. In second position was Balfour Beatty, with £404m of forward orders, largely in civils. This included a £115m contract for Balfour Beatty Civil Engineering to construct a new northern ticket hall as part of the phased development of King’s Cross St. Pancras underground station.

Balfour’s road management and maintenance company, RCS, was awarded extensions to two of its long-term local authority road maintenance contracts, adding £170m to its forward order book. The highways maintenance contract for North Yorkshire County Council, which was awarded in January 2002, has been extended by four years from 2008 to 2012. In Hampshire, the contract has been extended by one year to 2008.
The rest of the top 10 all secured less than £200m-worth of work. Third-placed Kier, with £191m, had a busy month for public sector work, pushing it up from eighth position in April.

Bovis Lend Lease was in fourth place after its SPV, established by its subsidiary Bovis Lend Lease Holdings and HSBC Infrastructure Fund Management, achieved financial close with the University of Sheffield on a £160m project to build and manage a new student village over a 40-year term.

Steady in fifth was Morgan Sindall, with a healthy order book in the social housing and commercial markets, netting it £120m of forward orders. Up one place to sixth was Rok, whose largest project was £60m of upgrade work for Rotherham Decent Homes.

The construction of seventh-placed 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. Laing has also taken on a £45m project to construct an office building for Ove Arup in London.

Renew made the most impressive leap up the chart, from 40th place in April to eighth, with £43m of work in the housing, public and commercial markets. Cowlin rose from 20th position to take ninth, thanks to a £30m contract over the Universities Partnerships Programme to build student accommodation and teaching facilities in Plymouth. Wates also enjoyed a boost, up 16 places to take 10th. Significant projects included a £20m housing refurbishment contract for Birmingham City Council.