Bechtel Favored for Huge London CrossRail Plan
Business Week: August 18, 2008
by Mark Leftly
Crossrail is inviting five groups to bid to become its partner in a rail link between Heathrow and Essex, with Bechtel said to have the edge.
Doug Oakervee, the executive chairman of Crossrail, will invite five parties to compete for the right to oversee the £16bn west-to-east London rail link this week.
U.S. giants Bechtel and CH2M Hill, as well as Kent-based Laing O'Rourke, are among the shortlisted groups. They will vie for the role of project delivery partner, similar to the job performed by CH2M Hill and Laing O'Rourke as part of the private sector consortium overseeing the construction of the London 2012 Olympic venues.
Crossrail's seven-strong board is expected to finalise the short list at a meeting tomorrow, with letters sent to the successful parties on Tuesday or Wednesday. A winner will be selected by the end of the year, at which point it will have to appoint companies to key contracts that will create the rail link from Heathrow to Essex.
Bechtel is considered the hot favourite for the role. Its bid team is headed by American Cliff Mumm, who oversaw work on the reconstruction of Iraq and the Jubilee Line extension on the London Tube. Bechtel was also heavily involved in guiding Crossrail through the Parliamentary process; the project only received Royal Assent last month, two decades after it was first mooted.
A transport industry source said: "Bechtel ought to get the job. It's a natural for them, given Bechtel's excellent performance on the Jubilee Line."
Laing O'Rourke has emerged as a contender for a role in its own right over the past two years. Its work on the Olympics was deigned to help it move away from being a straight construction firm and last year it hired Tony Douglas, who had overseen the building of Heathrow's Terminal Five.
However, a leading industry expert said that whichever company was selected would end up in conflict with another Crossrail appointment. The board will also hire a project manager to help Crossrail keep in contact with all its major stakeholders, including National Rail and London Underground, throughout the construction programme.
Although the role is subservient to the project delivery partner, the expert said: "Splitting it like this means there will be a nasty interface between the two selected parties. This has the potential to be another Millennium Dome."
The source warned that Boris Johnson, the London Mayor, should be on his guard that the flawed contractual structure behind Metronet, the failed London Underground group, is not reintroduced on the Crossrail project. This contract allowed the umbrella organisation to award maintenance work to its own construction divisions, a move that led to its downfall.
"If I were Conservative Party Central Office, I would be on Boris like a rash to make sure Transport for London helps run Crossrail properly."
Next month, headhunters will start approaching candidates to head up a revamped Crossrail. Rob Holden, the man who led the construction of the high-speed Channel Tunnel extension, is in line for the chief executive's role. However, he is known to favour the chairmanship, for which he would compete with Mr Oakervee.