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NCE Live News Updates Tuesday 14 January 2014: New skills college for HS2; Balfour Beatty drops track renewal bidding

Rail related stories are the theme so far this morning with the announcement from the government that the High Speed 2 scheme will establish a new skills college for engineers, and the news from Balfour Beatty that it intends to stop bidding for Network Rail track renewals work.

5pm: The Competition Commission has ruled that Lafarge Tarmac must yield one of its cement plants to enable a fifth cement producer to enter the British market.

The commission made the determination in a final report into the aggregates, cement and ready-mix concrete (RMX) market following a two year investigation.

It has also decided to increase competition in the supply chain for ground granulated blast furnace slag (GGBS-a partial substitute for and input into cement) by requiring Hanson to sell one of its GGBS production facilities.

Competition in the market had been restricted by the structure and conduct of the three largest producers – Lafarge Tarmac, Cemex and Hanson – which had aided coordination among them resulting in higher prices. They had refrained from vigorously competing with each other by focusing on their respective stability and shares, the commission said.

The commission added that it would also introduce measures to limit the flow of information and data concerning cement production and price announcements.

“We believe that the entry of a new, independent cement producer is the only way to disturb the established structure and behaviour in this market which has persisted for a number of years and led to higher prices for customers,” said commission deputy chairman Professor Martin Cave.

“Despite falling demand and increasing costs during the last few years, profitability among GB producers has been sustained and their respective markets shares have changed little. This is not what you would expect to see in a well-functioning market, under these circumstances.

“The problem in relation to GGBS stems from there being only one domestic producer (Hanson) which again leads to higher prices for customers.”

A summary of the remedies

Lafarge Tarmac will be required to choose between divesting either its Cauldon or its Tunstead cement plant. The purchaser of the divested cement plant will be able to acquire a limited number of RMX plants fromLafarge Tarmac subject to the purchaser’s total internal cementitious requirement being capped at 15% of the acquired cement production capacity. The buyer would have to be approved by the commission and cannot be an existing British cement producer.

Restrictions on the publication of British cement market data. Publication of data on cement production will be required to be delayed by at least three months from the time period to which it refers.

British cement suppliers will be prohibited from sending generic price announcement letters to their customers. Instead, any future price announcement letters will have to be specific and relevant to the customers receiving them.

Hanson will be required to divest one of its GGBS production facilities and Lafarge Tarmac will be required to enter into a long-term agreement to supply GBS to the acquirer of the GGBS production facility. The buyer will have to be approved by the CC and cannot be a GB cement producer.

 

 

11am: Consultant Opus International is to increase its staff by 25%.

It is looking to add 100 recruits to its 400-strong UK operations, with a focus on Manchester, Fareham and Hertford over the next 12 months.

“We are experiencing significant business growth, with a secured workload across all sectors,” said UK director Huw Edwards. “We have a growing demand for transportation asset management, particularly in the rail and highways sectors. We are also experiencing significant growth in property services and in our geotechnical and environmental business.”

Last year, Opus was placed 11th in NCE’s top 20 of British engineering recruiters.

Major frameworks include a long term asset management contract with Hertfordshire County Council, a National Site Investigation framework with the Environment Agency and Network Rail’s Civils Assessment Framework.

10am: Train building giant Hitachi has welcomed plans for a dedicated college to train rail engineers

Hitachi Rail Europe chief executive Alistair Dormer has welcomed today’s news that the government is to build a  dedicated further education college to train the next generation of railway engineers for High Speed 2.

“We are very pleased the government recognises the importance of good infrastructure,” he said. “Hitachi Rail Europe is investing in Britain’s future through a new factory at Newton Aycliffe, in County Durham, which will employ 730 people building trains for the home and export market with Made in Britain stamped on them.”

9am: Contractor Balfour Beatty is to stop bidding for Network Rail track renewal work.

The contractor announced its decision in a trading update ahead of its full year results for the year ending 31 December, which will be published on 6 March. Its existing contract for the rail work comes to an end this quarter.

Overall trading remains in line with expectations and with the firm’s third quarter interim management statement on 5 November 2013, it added.

Forward order books are also “broadly in line” with the £13.5bn from 31 December 2012, although the value of orders has been hit by negative foreign exchange movements, and a continuing shift of Balfour Beatty’s construction workload from the UK to the United States.

The contractor recently announced that it had won the contract to transform the London 2012 Olympic stadium and in the the £209M Denver North Metro Rail Line design-build job in Denver, Colorado.

 

8.45am: High Speed 2 Ltd has revealed plans for a new college to train engineers for the scheme.

The college will deliver the specialised training and qualifications needed for high speed rail, for the benefit of High Speed 2 (HS2) and other infrastructure projects.

Technical training will include rail engineering, environmental skills and construction. It will be the first new incorporated Further Education College in over 20 years, saidHS2 Ltd, which is promoting the HS2 scheme.

“HS2 is the biggest infrastructure project that this government is delivering,” said business secretary Vince Cable. “So it is right that a large scale investment in bricks and mortar should also come with investment in the elite skills which will help build it. That’s why this government is launching the first further education college in over 20 years, which will train the next generation of engineers in rail, construction and environmental studies that this country needs to prosper.”

HS2’s new chairman David Higgins said: “This country produces some of the best engineers to be found anywhere in the world. The problem is that there aren’t enough of them, and there isn’t a long enough guaranteed work-stream to keep them here. So they tend to go overseas.

“HS2 provides us with a unique chance to address both issues. The sheer length of the project means we can offer people a rewarding career in engineering staying in this country, whie the multiplicity of skills required means we will be equipping a new generation with experience at the cutting edge of technology.”

The new college aims to build relationships with affiliated facilities, including existing colleges, private training providers, higher education institutions and major supply networks off route

 

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