M&E contractors face rate cuts as work dwindles

M&E contractors in the South East are bracing themselves for dramatic cuts in rates next year as new work starts to slow to a trickle.

Firms in the sector are facing massive holes in their orderbooks for the back half of 2009. And the work drought is expected to lead to cut-throat competition between contractors as they chase a dwindling pool of jobs.

One M&E specialist said: “Everyone has been pinning their hopes on the Olympics, airport investment and the underground to keep things ticking over for the next few years.

“BAA is now being ordered to sell-off sites like Gatwick and Stansted, while the cash seems to have run out at Heathrow.

“We’ve already had the Metronet fiasco on the Tube – now fears are growing about the level of spending on the rest of the Tube.

“That only leaves the Olympics to fill the void because big commercial jobs are being cancelled constantly in London and no-one is building tower blocks at the moment.”

One beneficiary of the work downturn could be the purse holders of the 2012 Olympics as rates are driven down.

Another M&E expert said: “It’s all change on the Olympics now. Last year people were giving it a swerve and all the talk was of skills shortages.

“Now every M&E specialist in town will be fighting to get on board, which means their rates will only be going one way.

“The steel lads on the site got a good deal because it was drawn-up during different economic times.

But anyone bidding for an Olympic subcontract package now will see loads of competition and much lower rates.”