The role of the
MoD and the armed forces has changed in recent years, with threats
posed by international terrorism, a proliferation of weapons of mass
destruction and the consequences of failed States, meaning that
there is a demand for the armed forces to operate in a peace-keeping
situation, as well as operations which require the application of
military force.
Therefore the
requirements for the defence estate are changing in the sense that
greater flexibility of the armed forces is required, in terms of
scale of response and in terms of the speed of deployment. These
factors therefore need to be taken into account in future strategies
for development of the defence estate.
The Ministry of
Defence (MoD) is one of the largest landowners in the United Kingdom
and currently spends over £1billion per annum on its estate.
Defence Estates is an Executive Agency of the Ministry of
Defence. On 1 April 2005 Defence Estates was re-launched with
responsibilities for managing the defence estate as a corporate
asset on behalf of the MoD, and for the delivery of estate
maintenance, works and services. In 2006 the Defence Estates
Strategy was published, updating the 2000 strategy – ‘In Trust and
On Trust’.
Some of the key
priorities highlighted within this strategic document include
improving the condition of the built estate to support the military
need, raising the quality of life for the estate users, continuing
to improve procurement processes, rationalising and developing the
estate in a sustainable way and developing partnerships with
stakeholder bodies in relation to the use, management and size of
the estate.
Defence Estates is
increasingly using the PFI and PPP process to deliver capital
improvement programme, for example the Private Finance Initiative (PFI)
Project ‘Aquatrine’, to provide for MoD’s water and wastewater
requirements. Where PFI is inappropriate, Prime Contracting is the
preferred procurement route. For example there are five Regional
Prime Contracts (RPCs), which now provide core works and maintenance
services across the defence estate in Great Britain. Defence Estates
also aims to improve ways of managing the MoD's estate including
approaches such as Project Alexander and Prime Contracting
Initiatives.
According to the Stewardship
Report, new work and RMI construction commitments were £880m and
£1509m respectively in 2004/05. With the substantial scale of
building programmes still to come through, it seems likely that
these levels of construction will continue in the medium term
future.
The drive by the Defence
Estates to create greater efficiencies and reorganise the built
estate accordingly, is likely to lead to significant further
expenditure in the next few years. Some of this will be funded by
the sale of land on surplus sites, such as the Project MoDEL process
in the south east, while some will be government funded and some
will be PFI driven, such as the Allenby/Connaught project, signed in
March of 2006.
There are a number of major
projects underway in the defence sector including Project MoDEL,
which has a prime objective to consolidate defence facilities within
greater London, and is self funding on the basis of selling off a
substantial amount of land from surplus sites within the M25
boundary, potentially for house building purposes and consolidating
the development at RAF Northolt as the MoD’s first purpose core
site.
Project Allenby/Connaught
is a major PFI accommodation and services project, which will
provide modern living and working accommodation for some 18,000
military and civilian personnel in the Salisbury Plain and Aldershot
Garrisons. The Allenby/Connaught redevelopment is a PFI project
which will generate capital expenditure over the next 8 years,
though much of this will appear in private sector data, rather than
in the defence sector construction data.
Aquatrine
is an MoD-wide water and waste water PPP/PFI project, instigated
following the government’s 1998 strategic defence review, which
concluded that the MoD should divest itself of businesses or
operations deemed as ‘non core’. Project Aquatrine has now
transferred the responsibility for all maintenance and wastewater
operations throughout Great Britain to private sector companies.
This project is the largest private public partnership water project
to have been planned throughout the UK, worth ₤2.3bn. The project is
divided into three separate regions.
Under Project SLAM,
Debut services is managing the upgrading of the worst single living
accommodation (SLA) to a ‘grade1’ standard of physical condition by
2013. In total, around 21,340 bed spaces are to be upgraded by the
end of the programme. The build phase began in April 2003 with
construction work now underway. In Phase 1 of the programme (April
2003-April 2008), up to 13,000 bedrooms will be built within 86
projects at 36 sites.
Regional Prime Contracts
(RPCs) are primarily estate services
based, e.g. grounds, maintenance, building, grass cutting,
decoration, building maintenance etc. However some of the larger
Prime Contracts include extension to some facilities and new
facilities. There are 5 RPCs covering Great Britain.
Major contractors operating in
the defence sector include Bovis, who are part of the Debut
Services Consortium chosen for the MoD’s £1billion project SLAM
(Single Living Accommodation Modernisation), Balfour Beatty
who are active through subsidiary Mansell, Carillion, who are
working on approximately £1.5 billion worth of MoD contracts and in
over 75 MoD establishments throughout the UK including through
consortium Aspire Defence with KBR, Interserve, who are
working on MoD projects worth approximately £500m, Costain
who have an investment portfolio worth over £500m and AMEC.
Other major contractors
include Amey, Kier, Taylor Woodrow, Alfred McAlpine, Sir Robert
McAlpine and Laing O’Rourke.
Key consortia operational in
the defence sector include Aspire Defence, delivering the
Allenby/Connaught project, a combination of KBR and Carillion,
alongside a number of other partners, Debut Services Limited,
a joint venture between Bovis Lend Lease Limited and Babcock
Infrastructure Services and the Prime Contractor for the Regional
Prime Contract in the South West of England, Amec Turner, PriDE,
Babcock DynCorp and Inteq.
In summary, the opportunities
within the defence sector remain substantial. While a number of
major projects and initiatives are underway there remains a
substantial process of change in the defence estate and in turn this
is likely to create substantial building and construction
opportunities over the next few years.
