BAA plans to reduce construction costs with cheap foreign labour

12.11.2008   (Contract Journal)

BAA is looking to cut labour costs on airport construction work.

CJ understands that a major belt-tightening at the mega-client will usher in a
new era of procurement practices.

BAA revolutionised the way clients operate with its use of frameworks and the
T5 agreement, which offered industry-leading wages in return for improved productivity.

But the current downturn, and a change in ownership after the Ferrovial takeover,
means BAA is believed to be taking a different approach including plans to use
cheaper foreign labour.

One contractor said: “We’ve heard that BAA is considering plans to bring in workers
from abroad, including Spain, for future works and paying them as little as £6
an hour.

“That is a million miles away from the rates established during construction
of T5 and goes against everything established on that job.

“Things are getting really tough out there and it’s dog eat dog so it’s no surprise
that BAA is considering this.”

BAA special projects director Andrew Wolstenholme also quit the company recently
to join Balfour Beatty.

One union source said: “Wolsten-holme was the main man when it came to industrial
relations and was a keen supporter of the T5 ideals.

“With him gone I think things will take a different tack at BAA. Contractors
working on the framework deals will find that cost is much more of an issue now.”

A BAA spokesman said: “We have not conducted any formal supplier briefings on
this subject and there is currently no proposal to source workers from Spain.  
It is too early to comment on the resourcing strategy that may be adopted for
the construction of the new Heathrow East Terminal replacing Terminal 2.”


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