Barrett Byrd Associates

Renewed commitment to a long term programme of new-build and efforts to reduce tendering costs are making the Irish roads market appear an attractive prospect again. Jon Masters reports

Once bitten, twice shy suppliers may understandably regard Ireland’s roads market with some caution, but all the signs suggest an approaching bumper period of Irish road building. Contractors and consultants in Ireland report an upturn during 2004 and the National Roads Authority is due to announce a further five year £5.6bn programme of new build in 2005.

Such promise has loomed before and eventually disappointed, but the mood seems far more upbeat and confident of the workload materialising this time. Ireland has got to modernise its road network and if procurement developments are anything to go by, the NRA is also committed to making the Irish market more attractive to bidders.

Design & Build is now the preferred route for all new-build and widening schemes up to an apparent £100M level where Public Private Partnerships become viable. Several PPP road projects are now getting started and a long list of publicly procured D&B schemes is developing. The NRA has also awarded its first Early Contractor Involvement (ECI) contract.

“Procurement activity in Ireland had gone quiet, but picked up a great deal in 2004 as money from Europe coincided with growth in the Irish economy. There are now a lot of big schemes coming along and anything worth less than £40M is not considered to be big,” says Martin Ramsey, director of the Anglo-Irish consulting partnership Fehily Timoney Gifford (FTG).

FTG is consultant for a SIAC & Wills Brothers joint venture that was awarded a contract to upgrade the N15 Bundoran to Ballyshannon Bypass in 2004. Laing O’Rourke has won an N7 widening scheme between Limerick and Dublin and a major M50 Dublin orbital upgrade is approaching tender stage.

The Irish programme is mostly about greenfield dual carriageway for new bypasses and motorways though, such as schemes being developed to run parallel with the existing N2 and N6. The NRA says publication of its new five year ‘strategy’ will coincide with grant allocations to local authorities at the beginning of February and assume £6.8bn from the Irish Exchequer and the rest from the private sector.

“We presume it’s all going to go ahead,” says Ramsey. “There is generally a pragmatic attitude prevailing. Archaeology and environmental issues are considered very seriously, but fairly for all within European legislation and people want to improve their counties. Irish roads generally have a bad safety record as most arterial freight routes are single carriageway and pass through towns and villages, so public inquiries are tending to be relatively painless.”

The FTG partnership between Gifford and Cork based Fehily Timoney is one of several consulting link-ups established by British and Irish firms to bid for work in Ireland. It’s a similar situation on the contracting side, although by no means restricted to Irish-British partnerships.

The first Irish roads PPP, the 39km N4 Kilcock to Kinnegad motorway project, is being delivered by the Irish-Spanish Eurolink consortium and Irish contractor Ascon has started construction work of the £126M M1 Dundalk Western Bypass PPP with Spanish firm Dragados and Royal BAM stable mate Nuttall.

“It’s an interesting market,” says Ascon business development director Mike Jones. “Some big players left after the ambitious programme of the early 1990s failed to materialise, but now a lot of projects are back on again and we’re happy, albeit due to a much more measured and somewhat slowed down approach.”

According to Jones, Ireland’s roads market is also very competitive. The client is getting good prices and bid costs are high he says.

“We have had to gather more specialist knowledge of different contractual arrangements, which has not been too difficult being part of the BAM Group, but with nearly all jobs now D&B, tender costs are becoming heavy. It seems ECI is a better arrangement,” he says.

The NRA seems to be heeding its suppliers concerns and some procurement lessons learnt in the UK. Ireland’s principal road network, with long stretches of single carriageway to upgrade or bypass, is at a similar stage of development as was the UK equivalent in the 1960s. Forms of contract developed since then are now benefiting the Irish market.

“We are now spending around £1.2bn each year and the bulk of that is on new build, essentially because we are way behind on putting a primary network in place,” says NRA senior contracts manager Tim Ahern.

“We want to avoid adversarial contracts and cost overruns and with D&B we are looking for certainty of out turn. The emphasis is on cooperation and it has worked well so far, although we appreciate the cost of tendering is high and we are trying to address this.”

Efforts to reduce tendering costs are focusing on two NRA contracts for upgrades either side of a 6km bypass of Cashel on the N8 between Cork and Portlaoise, which was completed by Irish contractor Roadbridge last year. The NRA is planning to tender a trial target price NEC Option C contract for a similar job to the north. To the south of Cashel, the NRA has gone a step further, awarding its first ECI contract to a Roadbridge SISK joint venture.

“Our D&B contracts have tended to be lump sum thus far and we hope a move to the more loosely based target cost will reduce tendering costs significantly. The ECI will allow us to compare the effectiveness of developing detailed design ahead of statutory planning procedures, for reducing bid and project costs overall.”

Roadbridge SISK and FTG completed a £47M, 17.5km stretch of new M7 dual carriageway to bypass Monasterevin in 2004 – 50 weeks early, according to the contractor and the NRA (see box). “Monasterevin was a good indication that Roadbridge SISK could do the N8 job, but its bid was not lowest on price or highest on quality, but combined best overall,” Ahern says.

Such comment sounds encouraging for suppliers hoping to see some reward for taking on more risk through D&B contracts. However, according to Ahern, the uplift of tender prices the NRA expected as a result of the risk transfer has not come about. Neither has a rush of interest from bidders it seems. A recent invite to bid for an M50 upgrade PPP attracted only two bids.

“We always invite five contractors for schemes over the EU threshold of €5M and the response has shown a previous lack of confidence,” says Ahern. “Hopefully, now there is a firmer financing commitment, we will see more firms and consortia willing to take the one in five chance.”

Box

Adoption of the Design & Build form of contract in Ireland appears to be paying off in terms of bringing an early finish to road projects. The M7 Monasterevin bypass between Heath and Mayfield was opened to traffic in November 2004, 50 weeks ahead of the originally programmed finish date.

A Roadbridge/SISK joint venture with Fehily Timoney Gifford (FTG) as designer was awarded the £47M D&B contract to build 17.5km of new two lane motorway early in 2003. Work started in April that year, to a modified form of the Scottish Executive’s Alternative Tendering Initiative incorporating contract conditions similar to the ICE 5th Edition.

Initially a 130 week programme was set. FTG principal engineer John Wyles says weather played a hand in the project’s progress which then encouraged pursuit of accelerating construction.

“Inclement weather held back earthworks to begin with and led the contractor to increase resources to get back on programme. With the assistance of a very dry late summer and autumn, about 80% of the muck shift was completed in nine weeks and the project programme was effectively moved back into the black by several months,” says Wyles.

“Proposals for accelerating the scheme by six months had been discussed at an earlier stage and the success of the earthworks operation gave us confidence to plan a further accelerated programme and completion by Christmas 2004. The contractor had no formal agreement for this at first, but the atmosphere of trust and alignment of priorities engendered by the D&B arrangement helped to move everything along.”

The Monasterevin programme was also helped by adjustment of the road’s vertical alignment at design stage. This brought the earthworks into a cut/fill balance and precluded import of 600,000m3 of fill, without altering type of structures.

According to Wyles, construction of the road’s 10 bridges, including a three span crossing of the Barrow river, was also speeded up and asphalt paving resources were doubled. Irish Minister for Transport Martin Cullen opened the road four weeks ahead of the accelerated programme.

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