Balfour Beatty

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Balfour Beatty plc
TypePublic limited company
Traded as
LSE: BBY
ISINGB0000961622
IndustryInfrastructure: professional services, construction services, support services, infrastructure investments
Founded1909
FoundersGeorge Balfour
Andrew Beatty
HeadquartersLondon
Key people
Philip Aiken, Chairman
Leo Quinn (CEO)
RevenueIncrease £8,587 million (2020)[1]
Operating income
Decrease £13 million (2020)[1]
Net income
Decrease £30 million (2020)[1]
Number of employees
26,000 (2021)[2]
Websitewww.balfourbeatty.com

Balfour Beatty plc (/ˌbælfʊ ˈbiːtiː/) is a British multinational infrastructure group based in the United Kingdom with capabilities in construction services, support services and infrastructure investments. A constituent of the FTSE 250 Index, Balfour Beatty works across the United Kingdom, Ireland, the United States, Canada and South East Asia.

By turnover and profit, Balfour Beatty was ranked in September 2018 as the biggest construction contractor in the United Kingdom.[3]

History[]

Early years[]

Balfour Beatty was formed in 1909, with a capital of £50,000. The two principals were George Balfour, a qualified mechanical and electrical engineer, and Andrew Beatty, an accountant. The two had met while working for the London branch of the New York engineers JG White & Company. Initially, the company concentrated on tramways, the first contract being to construct the Dunfermline and District Tramways that opened in November 1909 for Balfour Beatty's own subsidiary, the Fife Tramway Light and Power Company.[4]

It subsequently acquired a portfolio of electric power and tramway companies including in Carlisle, Cheltenham, Leamington & Warwick, Llanelly, Luton, Mansfield, Nottinghamshire & Derby, Falkirk and Wemyss. Some later operated trolley and motor buses. Several bus companies were purchased or formed including Midland General, Percivals (Carlisle), Stratford Blue and Scottish General Omnibus.[4]

The Scottish bus subsidiaries were sold in June 1930 to W Alexander & Sons, and the Scottish tramways in 1935 to Scottish Motor Traction, Cheltenham was sold in July 1939 to Red & White Services with the remaining operations transferred to the Tilling Group.[4]

Balfour Beatty's general construction expertise was extended during First World War with, for example, the building of army camps.[5]

George Balfour was elected to the House of Commons in 1918 and played a large part in the debates which established the National Grid. To service this new market, George Balfour, Andrew Beatty and others formed Power Securities to finance projects, and the two companies, with their common directors, worked closely together. Balfour Beatty was heavily involved in the development of Scotland's hydro electric power, building dams, transmission lines and power stations.[5]

Other work between the wars included the standardisation of the electricity supply in Derbyshire and Nottinghamshire, and the construction of tunnels and escalators for the London Underground. Extensive overseas work started in 1924 when Balfour Beatty took over the management of the East African Power & Lighting company; construction work included hydro electric schemes in the Dolomites, Malaya and India, power stations in Argentina and Uruguay, and the Kut Barrage on the Tigris in Iraq.[5]

By the onset of the Second World War, control of the firm had changed: Andrew Beatty had died in 1934 and George Balfour died in 1941. Construction work was now dominated by the war effort, and notable projects included blocking the approaches to Scapa Flow and the building of six Mulberry harbour units.[6]

Post World War II[]

Peacetime saw a resumption of Balfour Beatty's traditional work, with power stations and railway work dominating at home. Overseas, a construction company was bought in Canada in 1953, and other work included the Mto Mtwara harbour in Tanganyika (now Tanzania) and the Wadi Tharthar irrigation scheme in Iraq.[5]

In 1969, Power Securities, which by then owned Balfour Beatty, was taken over by cable manufacturer BICC.[7] Balfour Beatty moved away from its traditional area of expertise in 1986, when it formed Balfour Beatty Homes, building on a modest scale from its office in Nottingham. It also opened offices in Paisley and Leatherhead, and in 1987, it bought the Derbyshire firm of David M Adams to give it an annualised production rate of up to 700 houses.[8]

Little more than a year before the housing market collapsed, through its parent BICC, Clarke Homes was bought.[9] By the middle of the 1990s, sales were down to only five hundred a year, and although no financial figures were ever published, the housing operation was believed to have suffered heavy losses. Balfour Beatty Homes was renamed Clarke Homes and then sold to Westbury in 1995.[10]

21st century[]

In May 2000, BICC, having sold its cable operations, renamed itself Balfour Beatty.[11] It then commenced a series of acquisitions, primarily in the United Kingdom and North America; in 2004, it also acquired Skanska's 50% stake in Hong Kong's Gammon Construction.[12] In 2011, Balfour Beatty sold its trackwork manufacturing business to Progress Rail.[13][14]

Acquisitions in the United Kingdom[]

The Queen Elizabeth Hospital, Birmingham under construction by Balfour Beatty

Balfour Beatty's acquisitions in the United Kingdom included: construction services business Mansell plc, for £42m in November 2003,[15] construction and civils contractor Birse plc, for £32m in August 2006,[16] Bristol construction company Cowlin Construction, also in October 2007,[17] and regional contractor Dean & Dyball for £45 million in February 2008.[18]

In November 2010, the company bought the remnant of collapsed construction company Rok plc for £7 million.[19]

North American acquisitions[]

In February 2007, Balfour Beatty acquired Texas based Centex Construction for £180m.[20] In February 2008, the company bought GMH Military Housing, a United States-based military accommodation business, for £180m.[21]

In September 2009, the company agreed to buy Parsons Brinckerhoff, a project management firm based in the United States, for $626 million.[22] Balfour Beatty sold Parsons Brinckerhoff to WSP Global for $1.24bn in October 2014.[23] In October 2010, the company bought Halsall Group, a Canadian professional services firm, for £33 million.[24]

In June 2011, it bought Howard S. Wright, one of the oldest contractors on the West Coast of the United States, for £58 million[25] as well as Fru-Con Construction, a water and wastewater contractor based in the United States, for £12 million[26] and in January 2013, it bought Subsurface Group, a consulting and engineering firm based in the United States.[27]

Rebuffed merger[]

In August 2014, the company rebuffed three offers by its rival in the United Kingdom, Carillion, for the two companies to merge. The last bid, which valued Balfour Beatty at £2.1 billion, was unanimously rejected by the Balfour Beatty board on 20 August 2014, one day before a deadline for negotiations to conclude. Balfour refused to allow an extension of time for negotiations which could have prompted a fourth bid.[28] Carillion subsequently announced it would no longer pursue a merger with its rival.[29]

In May 2021, it was announced that Lord Allen would be the next Balfour Beatty chairman, succeeding Philip Aiken from 20 July 2021.[30]

Controversies[]

Hatfield rail crash[]

Main article: Hatfield rail crash

In October 2005, Balfour Beatty was found guilty of breaching health and safety laws, and were fined £10 million for its involvement in the October 2000 Hatfield rail crash. The crash resulted in the death of four people, and injured more than 70.[31]

Blacklisting[]

Main article: Consulting Association

In March 2009, the company was found to be a subscriber to the Consulting Association, a firm which was then prosecuted by the UK Information Commissioner's Office for breaching the Data Protection Act by holding a secret database of construction workers details, including union membership and political affiliations,[32][33] and six enforcement notices were issued against Balfour Beatty companies.[34]

In January 2010, individual workers had started suing the company for being on the blacklist;[35] the first of these cases, however, was ruled in favour of the company.[36]

On 10 October 2013, Balfour Beatty was one of eight construction firms involved in blacklisting that apologised for their actions, and agreed to pay compensation to affected workers.[37] The eight businesses established the Construction Workers Compensation Scheme in July 2014,[37] though the scheme was condemned as a "PR stunt" by the GMB union,[37] and as "an act of bad faith" by Parliament's Scottish Affairs Select Committee.[38]

A High Court case regarding the blacklisting was scheduled for May 2016.[39] In October 2015, during preliminary stages of the case, the eight firms did not accept the loss of earnings that the blacklisting victims had suffered,[40] but, in January 2016, they increased their compensation offers.[41]

On 22 January 2016, the High Court ordered 30 construction firms to disclose all emails and correspondence relating to blacklisting by 12 February 2016,[42] after it emerged that Balfour Beatty managers had referred to blacklisted workers as ‘sheep’.[43] However, some settlements were eventually agreed, and on 11 May 2016, a 'formal apology' from the 40 firms involved was read out in court and the case (Various Claimants v McAlpine & Ors) was closed.[44]

In December 2017, Unite, announced it had issued high court proceedings relating to blacklisting against twelve major contractors, including Balfour Beatty.[45]

Late payment[]

In April 2019, Balfour Beatty was suspended from the UK Government's Prompt Payment Code, for failing to pay suppliers on time.[46] It was reinstated around 10 months later.[47]

Operations[]

Blackfriars station redevelopment, London, carried out by Balfour Beatty

Balfour Beatty designs, builds and maintains infrastructure across a number of sectors. Its capabilities include:[48]

  • Construction services: Design, construction management, refurbishment and fit out, mechanical and electrical services, civil engineering, ground engineering and rail engineering.
  • Support services: Installation, upgrade and maintenance of water, gas and electricity networks; rail renewals; street and public space management, operation and maintenance.
  • Infrastructure investments: A portfolio of long term (public–private partnership, 'PPP') concessions in the United Kingdom, primarily in the education, health and roads/street lighting sectors, plus a portfolio of long term military accommodation PPP concessions in the United States. Balfour Beatty also has interests in non PPP assets in the United Kingdom.

Balfour Beatty is a member of Constructing Excellence, the Business Services Association and of Build UK, comprising some members of the Confederation of British Industry.[49]

Notable projects[]

London Aquatics Centre built by Balfour Beatty

Projects involving Balfour Beatty include:

  • The Kut Barrage, Iraq, completed in 1939[5]
  • The Churchill Barriers, Orkney, completed in 1940-44[50]
  • The Kielder Dam, Northumberland, completed in 1982[51]
  • The Docklands Light Railway in London, completed in 1985[52]
  • Large parts of the M25 motorway around London, completed in 1986[53]
  • Sheffield Supertram, completed in 1994[54]
  • The Channel Tunnel, completed in 1994[55]
  • The Cardiff Bay Barrage, completed in 1999[56]
  • The University Hospital of North Durham, completed in 2001[57]
  • The Lesotho Highlands Water Project, completed in 2002[58]
  • Nam Cheong station, Hong Kong, completed in 2003[59]
  • The Pergau Dam hydroelectric project in Malaysia, completed in 2003[60]
  • The M6 Toll, completed in 2003[61]
  • New facilities for the Royal Infirmary of Edinburgh, completed in 2003[62]
  • University College London Hospital, completed in 2005[63]
  • Igor I. Sikorsky Memorial Bridge, Connecticut, USA, completed in 2006[64]
  • Royal Blackburn Teaching Hospital, completed in 2006[65]
  • Dubai Mall, completed in 2008[66]
  • The United States Capitol Visitor Center, completed in 2008[67]
  • The King's Cross St Pancras tube station Northern Ticket Hall, completed in 2009[68]
  • Tameside General Hospital, completed in 2009[69]
  • Redevelopment of Stobhill Hospital in Glasgow, completed in 2009[70]
  • Queen Elizabeth Hospital Birmingham near Selly Oak, Birmingham, completed in 2010[71]
  • Pinderfields Hospital in Wakefield, completed in 2010[72]
  • Pontefract Hospital, completed in 2010[72]
  • The East London line, completed in 2010[73]
  • The A3 Hindhead Tunnel, completed in 2011[74]
  • The London Aquatics Centre, completed in 2011[75]
  • The M25 motorway widening J16 to 23 and J27 to 30, completed in 2012[76]
  • Extension to the Victoria Hospital in Kirkcaldy, completed in 2012[77]
  • The Blackfriars station and Bridge Construction Works, completed in 2012[78]
  • The rebuilding of Salford Royal Hospital, completed in 2012[79]
  • The new main facility for Parkland Memorial Hospital in Dallas, Texas, completed in 2014[80]
  • The M4/M5 Managed Motorways project in Bristol, completed in 2014[81]
  • Providence Tower, London, completed in 2015[82]
  • British Columbia Women's and Children's Hospital Acute Care Centre, Vancouver, Canada, completed in 2017[83]
  • Aberdeen Western Peripheral Route, completed in 2019[84][85]
  • Crossrail Liverpool Street station and Whitechapel station tunnels project, due to complete in 2020[86]
  • Green Line Extension, in Cambridge, Somerville, and Medford, Massachusetts, due to complete in 2021[87][88][89]
  • The Viking Power Link between Denmark and the UK, due to complete in 2023[90]
  • Old Oak Common Station due to complete in 2030[91]
  • HS2 lots N1 and N2, working as part of joint venture, due to complete in 2031[92]

References[]

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External links[]

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