‘It makes me smile actually,’ says Mark Bullock, managing director of Balfour Beatty Rail. He’s referring to rumours that Balfour Beatty, one of Britain’s largest and longest-standing construction and engineering firms, is pulling out of rail. It’s a rumour which has been fuelled by the sales of Parsons Brinckerhoff and Signalling Solutions but, according to Mark, these events only tell part of the story.
‘It makes me smile because we remain a very large and significant player in the UK rail infrastructure market,’ says Mark, who has been in charge of the rail division since 2012.
He’s now setting the record straight. ‘I think internally there’s been a need for us as leaders of this business to reassure our staff that that’s not the case and when they read silly things in the press that often it’s not true.
‘Some of our competition thinks it, but they can think what they like about us; we don’t really mind as we have been quietly going about improving our business and working hard to ensure customer satisfaction.’
The Balfour Beatty Group’s financial performance has been pored over by journalists and analysts in detail over the past few years. Its past difficulties have led to the appointment of a new chief executive, Leo Quinn, in January 2015 and the formulation of a long-term, company- wide transformation programme, Build to Last.
Judging from media and analyst reaction to the company’s full-year results, the programme is working. In Balfour Beatty’s own words, it has made strong progress, is taking hold and is returning the company to strength. But in this time of change for the group, the rail business has carried on as normal and has been performing well, says Mark.
‘I think it’s worth stating that the rail business’ trading over the last couple of years has been pretty much in line with our plan.’
What did change in that period were the rail division’s priorities. UK projects became the focus and a number of international rail businesses, established in the hope that they would open the door for Balfour Beatty in new markets, were sold off.
‘Rail activities had been quite successful in gaining a share in overseas markets but other parts of the business had not followed,’ Mark explains. ‘So at the end of 2012, when you stepped back and looked at it, we actually had a number of effectively stranded rail activities in markets that didn’t fit with the core strategy of the group.’
STRATEGIC REVIEW
International businesses in Italy, Scandinavia and Germany have been sold off in the past couple of years. Last year, Balfour Beatty also sold its 50 per cent stake in Signalling Solutions and the year before that WSP acquired its professional services division, Parsons Brinckerhoff.
‘When we looked at the UK market, we were very successful from 2012 through to 2014 in growing the business, so we saw quite a significant growth in turnover during that period of time. So the business, despite coming out of our international activities, continued to be a really important part of the group and was making very good progress.
‘But when we looked at our portfolio, I guess like any business, there were some parts of it that were performing better than others. Therefore we carried out a strategic review of the UK rail activities and made a decision that certain aspects we wanted to continue with and others, for the time being, weren’t for us.’
RAIL SYSTEMS
Balfour Beatty Rail provides multidisciplinary rail infrastructure services across the lifecycle of rail assets and can be broken down into four distinct business units, says Mark: Rail Systems, Rail Plant, Traction Power and Engineering and Technology Solutions. It is the Rail Systems side of the business that has made significant contributions to major projects like Thameslink and Crossrail.
Balfour Beatty is building the new Crossrail station at Abbey Wood and is delivering the associated infrastructure works. ‘I think we can rightly boast that we were the first contractor to hand over a piece of useable rail infrastructure to Crossrail out of Abbey Wood.’
Track Partnership, a joint venture between London Underground and Balfour Beatty Rail, represents another large chunk of the company’s activities. In March, Balfour Beatty was awarded a £170 million two-year extension to its Track Partnership contract for London Underground.
‘We’ve grown this contract over the last few years quite significantly,’ says Mark. ‘As we’ve delivered more and more innovation and productivity for the client, they in turn have been generous enough to give us more and more work.’
GROWING AREAS
Although the refocusing of Balfour Beatty Rail has involved divesting of certain areas of the business, it has also targeted growth in other areas, including the company’s OLE, P-Way and civils design team.
Balfour Beatty’s withdrawal from the final stages of the North West electrification scheme made the headlines but, again, they didn’t tell the whole story. ‘Whilst it’s true to say we’ve withdrawn from that specific scope of work, by mutual agreement with Network Rail, we actually have just signed two contracts to provide design resource for the schemes that are currently being worked on, so we’re in there with the design capability; we’re just not building it.’
Interestingly, some of this work is being carried out more than 6,000 miles away by engineers in Balfour Beatty’s office in Kuala Lumpur. ‘In the past they’ve done work in the local market and in the future they will continue to do so, but at the moment actually most of their work is for the electrification in the North West of England, so that’s a case of us going overseas and actually importing some of those skills back to the UK.’
Another area in which Balfour Beatty Rail is investing is its plant hire and maintenance business with the company currently operating and maintaining plant for Network Rail, London Underground and Irish Rail.
CLEVER TECHNOLOGY
Mark gets particularly excited when discussing the company’s Technology Solutions division, ‘There’s some really clever technology in there.’
Specifically, he’s referring to intelligent asset monitoring systems. Developed by Balfour Beatty Rail engineers, the systems monitor assets and detect failures before they occur. On the Singapore Metro, the company has installed signalling monitoring technology.
Balfour Beatty engineers are also involved in the Intercity Express Programme (IEP), developing a laser monitoring system which will be fitted to the trains to create a 3D scan of the infrastructure as it passes by. Says Mark, ‘That business has been very successful in expanding its product range and it’s been very successful in the last two to three years in expanding overseas, so we now export quite a lot of our technology to overseas markets.’
PASSIONATE ABOUT SAFETY
Mark explains that Balfour Beatty Rail has taken an approach which brings management and the front line workforce together to consider and take action on risk. This has included critically re-examining risk, and encouraging employees and supply chain partners to do the same.
He says that following this change the company has seen a greater awareness for risk and more direct involvement from employees in helping to identify potential hazards, which in turn has increased the reporting of close calls and delivered a positive impact on injury frequency rates.
Mark’s passion for safety is clear, ‘When I joined Balfour Beatty Rail, I came with a clear objective to further improve our safety performance and this objective remains at the forefront of everything I do. We will continue to drive improvements and efforts towards creating a safety-comes-first culture across the company.’
CONFIDENCE IN THE FUTURE
In January, the High Speed Two Balfour Beatty VINCI joint venture appointed a managing director, Peter Anderson, who was the previous MD of Balfour Beatty Rail. The joint venture is looking to secure a significant share of the HS2 construction programme, including enabling works, main civils works, stations and elements of rail systems.
‘HS2 is a huge prospect that we’re really excited about. We’ve been working on it for probably four years now, which sounds incredible when I say it,’ says Mark.
Balfour Beatty Rail employs around 1,600 people and recruited just fewer than 300 people last year. Its growing workforce includes 23 apprentices, 21 graduates and 40 trainees.
Balfour Beatty is a member of The 5% Club – it was the first infrastructure company to sign up in 2013, which means it has committed to having at least 5 per cent of its UK workforce made up of apprentices, graduates and sponsored students within five years of joining. The company has already achieved 4.6 per cent in just three years.
Mark says the outlook is positive. ‘At this point in time, we’re hugely optimistic and enthusiastic about the future. We’ve had a sustained period of growing the profitability of our business over the last few years and that’s given us a great deal of confidence in the future.’
