Amec Company Profile
Amec is an engineering, project management and consultancy company. It merged with Foster Wheeler in 2014 to become Amec Foster Wheeler. It serves the energy, infrastructure and mining industries. Customers have included BP, Shell, GDF Suez, ExxonMobil, Dow, EDF, U.S. Dept of Homeland Security, Hyundai, Rio Tinto, Northumbrian Water, Chevron, Saudi Aramco and Petronas.
You can find our 2002 Company Profile of Amec and other articles in the right hand column of this page.
Click here for Amec’s head office and other basic information from the opencorporates website.
Click here for details of Amec’s latest profits and other financial results from the Bloomberg website.
There is also lots of useful information on Amec‘s website:
- Click here to find out which industries the company is operating in.
- Click here to find out who’s on Amec’s board of directors.
- Click here to download Amec’s latest annual report and accounts.
For a more critical perspective on Amec’s work try the Powerbase profile.
The Company
Summary
| Headquarters and registered office: Sandiway House Hartford Northwich CW8 2YA UKTel: 01606 883885 Tlx: 669708 Fax: 01606 883996 | AMEC London details & CEO: Peter Mason Chief Executive AMEC Plc Carter Lane London EC 4V 5HF+44 (0)20 7574 3999 / 75395800 (0)20 7574 3199 |
www.amec.com AmecLondon@amec.com
Overview
Industry Areas
Materials & Construction – Engineering & Architectural Services
CEO Peter Mason about AMEC:
“AMEC is a provider of services and engineering solutions to the international infrastructure, manufacturing and process industries. The way we see ourselves is creating value for clients through the application of our technology. More and more we are working in an alliance and partnership basis with our clients, moving away from the traditional relationship and traditional forms of contract. We are very much a design-led business.”[i]
Market Share/Importance AMEC claims to be ‘a leading international provider of services and engineering solutions to the world’s infrastructure, manufacturing and process industries.’ In June 2000, construction industry business journal ENR Magazine[ii] labelled AMEC as the world’s largest firm, based on international revenue for design services generated outside the company’s UK home market.[iii] For the year 2001, ENR Magazine ranked AMEC #1 in its list of Top International Design Firms,[iv] and #12 in its list of Top International Contractors.[v]
AMEC owns 46 per cent of SPIE S.A., the international electrical engineering, infrastructure and construction services company based in France, and will likely buy the balance of SPIE early 2003. SPIE holds a strong position in the telecom market, is the leading telecom and network integrator in France and the 3rd largest in Europe (see section on subsidiaries). Together, AMEC and SPIE employ over 50,000 people in around 50 countries and generate total turnover of approximately £5.5billion.[vi] The oil & gas market accounts for 25% of AMEC sales.
AMEC’s top competitors include:
- ABB – ABB serves manufacturing, process and consumer industries, utilities and the oil and gas markets. Worldwide ABB employs 160,000 people in more than 100 countries and reported revenues of $23 billion in 2000[vii]
- Amey – Amey is aiming to transform itself from a construction firm into a major provider of business services in the UK.Net Income: $30 million in 2000[viii]
- Fluor – Fluor is a world-leading engineering and construction company; the company designs, builds and staffs offices. Net Income: $19 million in 2001[ix]
- Balfour Beatty is engaged in construction and engineering in the Asia/Pacific Rim region, Europe, and North America. It handles civil, rail, and power engineering for a wide range of projects. Net Income: $106.0 million in 2000[x]
History/Introduction
AMEC’s roots and growth AMEC Plc has roots dating back to 1848, when Matthew Hall opened a lead-work business in Lambeth. This later became the Matthew Hall Group of Companies. In 1883 Leonard Fairclough started a stone business, which expanded into Construction at the turn of the century. Fairclough Construction and William Press, also a construction group (founded in London in 1913), merged to form AMEC Plc. Six years later the Matthew Hall Group of Companies was incorporated into the AMEC Group.'[xi] In 1982, AMEC was incorporated in England and Wales.
AMEC expanded overseas in 1997 when it took a 42% stake in French builder SPIE Batignolles. The company grew further in 2000 with the £221m takeover of Canada’s AGRA.[xii] (For further information regarding SPIE and AGRA see the section on subsidiaries). Investments in SPIE and AGRA have transformed AMEC from being a largely UK oriented business to one with three major markets being the UK, continental Europe and North America. The proportion of total turnover in the UK has been reduced from 71 per cent in 1995 to 35 per cent in 2001.[xiii] Expansion into rapidly developing markets such as South East Asia has been stated as a constant priority for the group.[xiv]
Changing Focus AMEC started off as a low-margin construction firm, but soon embraced a strategy of reducing the volume of domestic business carried out in traditional contracting in favour of international opportunities and higher value added projects. In the Annual Report 2000 CEO Peter Mason put it like this: “Over the past few years, AMEC’s core business strategy has been to generate value for shareholders by transforming the company into a global, service-driven enterprise with a strong base of predictable, recurring revenues from long term clients.”[xv] The transformation strategy seems to have paid off; AMEC has delivered solid profits over the last couple of years.[xvi]
Recent Performance & Economic Outlook AMEC has increased group pre-tax profit in each of the last five years, from £47.5 million in 1997 to £116.7million in 2001.[xvii] Chairman Gillibrand proudly described 2000 as “a year of excellent results”. It was a year of intense corporate activity, with the acquisition of AGRA in North America and the further development of the company’s partnership with SPIE.[xviii] AMEC also had a successful year in the UK, as the company continued to take advantage of the opportunities opened up by the UK government selling off the country’s public utilities through its Private Finance Initiatives (PFIs). AMEC reached financial closure on three large schemes in 2000, including the company’s second major hospital project.[xix]
During 2001 new contracts in upstream oil and gas, transportation and environmental consulting were secured. Details of contract awards and partnerships are available at www.amec.com/news/.[xx]
Following the terrorist attacks in New York and Washington on September the 11th 2001, AMEC won big contracts for clearance and reconstruction at both the Pentagon and World Trade Centre sites.[xxi] AMEC expects to spend the rest of this year (2002) clearing rubble from the World Trade Centre site. AMEC also stated that plans to exercise its option to acquire the 54 per cent of SPIE are progressing well, but are subject to shareholder approval. The buy-out will also require EU competition approval, although CEO Mason believes that this will be ‘a formality’.[xxii]
AMEC’s short-term economic future looks bright with new war-related work coming in and with AMEC’s ongoing involvement in Public-Private Partnerships (see also Corporate Crimes section).
Corporate Social Responsibility AMEC claims to be highly committed to sustainability and published its first sustainability report in 2001. When answering the question ‘why sustainability?’ AMEC is upfront: Integrated sustainability reporting is “simply good business”.[xxiii]
CBE Gillibrand said: “We believe that the company’s performance [as reported in the sustainability report] will continue to benefit from the high priority we give to the management of safety, health and environmental issues.”
See: AMEC plc Sustainability – Getting started on reporting 2001. This document can be ordered at AMEC free of charge. It includes reporting on the company’s health and safety performance, on ethical business conduct and environmental performance, on community involvement and on AMEC’s employee and human rights record.
AMEC’s rather random list of historical events can be viewed at: http://www.amec.com/aboutamec/level2abouthistory.asp?pageid=6
References [i] Interview with AMEC CEO Mason about AMEC’s merger with AGRA. Available online at: http://twst.com/notes/articles/kas001.html (source: The Wall Street Transcript, date viewed: 24.02.02)
[ii] ENR Magazine homepage: www.enr.com [iii] www.amec.com/aboutamec/level2about.asp?pageid=1 (AMEC profile, source: AMEC, date viewed: 12.02.02)
[iv] www.enr.com/dbase/2001tid.asp (source: ENR Magazine, date viewed: 12.02.02)
[v] www.enr.com/dbase/2001tic.asp (source: ENR Magazine, date viewed: 12.02.02)
[vi] AMEC plc Annual Report and Accounts 2001, page 2
[vii] ‘Donald P. Aiken named president of ABB in the US’, ABB Press Release, ABB USA News, 03/05/01
[viii] www.hoovers.com/co/capsule/6/0,2163,93516,00.html (source: Hoover’s Online, date viewed: 12.12.02)
[ix] www.hoovers.com/co/capsule/4/0,2163,10594,00.html (source: Hoover’s Online, date viewed: 12.12.02)
[x] www.hoovers.com/co/capsule/9/0,2163,90099,00.html (source: Hoover’s Online, date viewed: 12.12.02)
[xi] www.users.globalnet.co.uk/~djw02/Assets/Amec_PLC/amec_plc.html (AMEC profile, source: MIDAS Investment Club, date viewed: 12.02.02)
[xii] ‘Railtrack is still a good idea’, The City Interview, Daily Mail, 28 June 2001, website: www.thisismoney.com/20010628/nm34242.html accessed 22 April 2002
[xiii] AMEC Annual Report and Accounts 2001
[xiv] Directory of Multinationals, 5th Edition, The World’s Top 500 Companies, Volume 1, A-J, Publisher: Waterlow, London, 1998, page 9
[xv] AMEC Plc Annual Report and Accounts 2000, ‘Knowledge, Innovation, Technology’, CEO’s review, 7 March 2001, page 5
[xvi] (NewsWeb) AMEC Plc continues with its strategy of transforming business and has delivered another solid profit and cash performance in 2001. Extel Company News – United Kingdom; Jan 10, 2002, can be viewed online at: http://globalarchive.ft.com/globalarchive/article.html?id=020110012761&query=AMEC (source: Financial Times, date viewed: 20.02.02)
[xvii] AMEC Annual Report and Accounts 2001
[xviii] AMEC Plc Annual Report and Accounts 2000, ‘Knowledge, Innovation, Technology’, Chairman’s statement, 7 March 2001, page 3
[xix] AMEC Plc Annual Report and Accounts 2000, ‘Knowledge, Innovation, Technology’, CEO’s review, 7 March 2001, page 6
[xx] AMEC Annual Report and Accounts 2001
[xxi] www.amec.com/news/level2news.asp?PageID=174 (source: AMEC, date viewed: 21.02.02)
[xxii] ‘Strong demand for AMEC Services’, Financial Times, 8 March 2002, FT.com website: http://globalarchive.ft.com/globalarchive/article.html?id=020308005692&query=AMEC accessed 28 March 2002
[xxiii] AMEC Annual Report and Accounts 2001, page 18
Products & Projects
AMEC plc started off as a construction and engineering company. The company’s interests gradually expanded and now involve civil, railway, road, airport, and power engineering, building and building services and maintenance, asset management, feasibility studies and environmental consulting.
Market segmentation[xxiv]:
Energy 25%
Transport 20%
Infrastructure 15%
Process and manufacturing 10%
Environmental 5%
Public sector, other 25%
The company operates through three sections: Capital Projects (Construction Management & Construction), Investments (Property Development & Public Private Partnerships), and Client Support Services (Consulting and Design & Operations Support). In 2000, Capital Projects accounted for 41%, Investments for 11% and Client Support Services for 48% of AMEC’s total operating profit (equalling £154.7 million).[xxv]
Capital Projects
AMEC’s Capital Projects division specializes in construction and construction management in the following market sectors:
- Commercial – focused on offices and business parks as well as buildings for manufacturing, retail and leisure;
- Consumer and Industrial products – including units for the production of food & beverages, cement, cosmetics & toiletries, automotive, electrical goods as well as storage warehouses;
- Energy – the Energy Division has facilities for oil and gas extraction and refining and the production of energy from nuclear, thermal, hydro-electric and renewable sources;
- Forestry – focused on the construction of mills for pulp & paper products;
- Transportation – focused on the planning, construction, inspection and maintenance of highways, bridges, tunnels, railways and airports;
- Mining – AMEC’s Mining Division is involved in the construction of facilities for mining copper, gold, silver, lead, zinc, nickel, cobalt and platinum group metals.
- PharmaChem – PharmaChem is the Group’s arm involved in the building of laboratories for pharmaceutical, biotechnology and fine chemical industries;
- Public – AMEC’s Public division is dedicated to the construction of waste disposal facilities, conference centres, hospitals, accommodation, prisons, roads and other infrastructure;
- Utilities and Telecoms – The Utilities and Telecoms division offer continuous support services ranging from asset amelioration programmes and infrastructure investment programmes as well as data management and the outsourcing of asset operation and maintenance[xxvi]
A few examples:
- Yusefeli Dam, Turkey (see Corporate Crimes)
- Dam on Belize’s Macal River, subcontracted by Fortis (see Corporate Crimes)
- Reconstruction at both the Pentagon and World Trade Centre sites
- Pulp and Paper mills in Indonesia (see Corporate Crimes)
- Major new International Arrivals Terminal at JFK Airport in New York
- Major petrochemical plants completed for Sinopec in China (see crime section) and BP in Grangemouth, UK
- Shearwater oil and gas facility completed for Shell in the North Sea
- Completed assignments include the Hong Kong International Airport and the UK’s largest cold store distribution centre in Birmingham, UK[xxvii]
Investments
AMEC’s investment division consists mainly of its public-private partnerships and regeneration schemes in areas such as defence, education, hospitals, accommodation, prisons, roads and other infrastructure. The UK government offered AMEC numerous PFI (Private Finance Initiative) contracts (see ‘links with governments’ and ‘corporate crimes’ sections).
A few examples:
- Building and design of Manchester Airport 2nd Runway, UK
- Birmingham Northern Relief Road (BNRR) – AMEC is part of the consortium that is building the road (see Corporate Crimes section)
- Involvement in a re-housing project at DSS (UK Department of Social Security) Newcastle Estate, Newcastle; the first major UK accommodation based PFI project involving a significant element of new build[xxviii]
- AMEC has won the contract to design, build, finance and operate a major 30-year life maintenance scheme for the UK Highways Agency
- Jubilee Line Extension Nº 102, Green Park to Waterloo (the London Underground), UK
- Completed Cumberland Infirmary in Carlisle – the first major PFI district general hospital to be opened in the UK
- Secured private finance contracts in consortia for the £200 million A13 in East London and a £94 million sewage treatment project in Ayrshire, Scotland
Client Support Services
AMEC supports clients in a wide rage of industries (defence, transport, forestry, energy, public utilities, telecom, mining, pharmaceuticals, biotechnology, etc) with a wide range of services such as design, feasibility studies, environmental impact assessments, concept development, operational support services, and risk analyses & management.
A few examples:
- Design, procurement, fabrication, commission and maintenance of the Shell Shearwater facility in the UK Continental Shelf
- Provision of operational support for Malampaya, the most significant offshore energy project ever undertaken in the Philippines. Contract awarded by Shell Philippines Exploration (SPEX)[xxix]
- Feasibility studies for De Beers on a new Canadian diamond mine
- Blyth Offshore Wind Farm, UK (AMEC provided development expertise, sourced funding and proudly claimed to be ‘the seed that formed the consortium to build the first offshore wind farm in UK waters’)
- Environmental services in North America for long term clients including Exxon, Noranda, BASF, Wayerhauser, Ford and the US Airforce
- Long term pharmaceutical service contracts for Aventis, Novartis, Eli Lily and BASF (2000)
- ‘Evergreen’ contract for BP at its UK Coryton Refinery in Essex, UK
- Shutdown and maintenance activity for repeat clients Du Pont, BP Amoco, Huntsman and Union Carbide in the UK
Find out more about AMEC’s services, categorized by: Capability: http://www.amec.com/ourservices/level2servicesbycapability.asp Market sector: http://www.amec.com/ourservices/level2services.asp?pageid=86 And Geography: http://www.amec.com/ourservices/level2servicesbygeography.asp
Partnerships
On big projects, AMEC often works with other construction/civil engineering companies, forming so-called consortia. Substantial co-operation with the UK government takes place through the Private Finance Initiatives. Government support for AMEC through development aid can also be considered a partnership, with both parties gaining from business opportunities in the Third World.
B2B Virtual Marketplace AMEC, Bovis Lend Lease, Hochtief and Turner, and Skanska announced a new global business-to-business venture. The virtual marketplace is said to be ‘neutral, open to the entire industry, and the first of its kind in the construction industry’.
Read more at: http://www.amec.com/news/MediaRelease.asp?MEDIAID=161
Clients AMEC’s clients include Shell, BP Amoco, Union Carbide, De Beers, DuPont, Novartis, GlaxoSmithKline, AstraZeneca, Huntsman, Exxon, BASF, Noranda, Wayerhauser, Ford, the US Airforce, UK Ministry of Defence (MoD), Hewlett Packard, Eli Lily, Aventis, BAA, General Electric, General Mills, Agrium, the BBC, BT, and various governmental bodies (see links with government section), both in the UK and abroad.
On the AMEC website you can find links ‘to obtain further information about various industries (such as airports, capital projects, oil, gas & power, Pharmachem, railways, and utilities) the company serves’.
See: http://www.amec.com/investis/level2investors.asp?pageid=259
References [xxiv] AMEC Annual Report and Accounts 2001, page 9
[xxv] AMEC Plc Annual Report and Accounts 2001, page 5
[xxvi] www.users.globalnet.co.uk/~djw02/Assets/Amec_PLC/amec_plc.html (AMEC profile, source: MIDAS Investment Club, date viewed: 12.02.02)
[xxvii] www.users.globalnet.co.uk/~djw02/Assets/Amec_PLC/amec_plc.html (AMEC profile, source: MIDAS Investment Club, date viewed: 12.02.02)
[xxviii] www.amec.com/ourservices/level3services.asp?pageid=14 (AMEC’s Projects and Experience, source: AMEC, date viewed: 12.12.02)
[xxix] www.amec.com/ourservices/level3services.asp?pageid=9 (AMEC’s Projects and Experience, source: AMEC, date viewed: 12.12.02)
SPIE
AMEC currently owns 46% of SPIE, and has the option to purchase the remainder of SPIE at the end of 2002. In 2001, SPIE employed a total of some 25,000 employees and generated total turnover of £1.9billion.[lxiv] The investment in SPIE provided AMEC with access to France principally, but also other markets in Europe.
SPIE – About the Company
In 1900 the Paris Company for Electric Railway and Tramway Industries was founded to develop industries related to railways, tramways and the production and distribution of electric power. The company eventually changed its name to Société Parisienne pour l’Industrie Électrique (SPIE). Early in its history, SPIE was involved with building some of the first lines of the Métropolitain de Paris – the Métro – and before 1918 it had undertaken work on ballasting, track laying and installation of the third rail for several of the lines.
The Société de Construction des Batignolles, founded in 1846 by Ernest Goüin, is the oldest part of the SPIE group with the longest connection with the railway industry. Batignolles was involved with an early attempt at building a Channel Tunnel in 1882. Outside France, Batignolles was involved in the construction of railways in many parts of the world, often in mountainous terrain where its bridge and tunnel expertise could be used to good effect.
During the 1960’s, Construction des Batignolles and SPIE became subsidiaries of the Schneider Group, merging to form Spie Batignolles. In 1989 the combined business acquired Drouard, a specialist in laying railway track, and became a major force in the design and building of high-speed (TGV) railway lines, returning to its early specialisation. The company was heavily involved in the construction of the Channel Tunnel, especially electromechanical and traction power supply equipment.
In February 1997, AMEC and Financière Spie Batignolles, a company owned by its employees, acquired Spie Batignolles from Schneider, changing the name to SPIE in 1998. AMEC currently owns 46% of SPIE, the balance being held by Financière Spie Batignolles.[lxvi]
SPIE and Railways AMEC and SPIE have joined forces to win substantial rail work in the UK.
See AMEC website: http://www.amec.com/news/amec_december2000/frenchcon.htm
SPIE and Telecom
On 8 October 2001, SPIE acquired a 60.2 per cent majority stake in Matra Nortel Communications Distribution (MNCD) in a move that will enhance SPIE’s network capability for providing telecom and distribution services to businesses in France and across Europe. Under the terms of the agreement, SPIE will progressively increase its shareholding in MNCD to 100 per cent over the medium term. MNCD has a turnover of approximately £150 million.
In addition to the MNCD acquisition, SPIE is also seeking partnerships with Nortel Networks and EADS (The European Aeronautic Defence and Space Company) in the enterprise, telecom carrier, defence and security segments.[lxvii]
SPIE and the Yusufeli Dam Project, Turkey
On the 14th of March AMEC announced that they had pulled out of the Yusufeli Dam. They are, however, still involved in the project via their 46% shareholding in SPIE (see Corporate Crimes section).
References [lxxiv] ‘AMEC Investor Contacts’, AMEC website: www.amec.com/investis/level2investors.asp?pageid=299 accessed 5 March 2002
[lxxv] Hemscott Business Directory, website: www.hemscott.co.uk/equities/company/cd00050.htm accessed 5 March 2002
[lxxvi] O’Dwyers PR Daily, Breaking PR News, 8 June 2001
[lxxvii] CBI CHIEF SAYS NEW DEVELOPMENT TAX UNDERMINES WELCOME PLANNING OVERHAUL, CBI News Release, 15 March 2002, CBI website: www.cbi.org.uk/ndbs/press.nsf/0363c1f07c6ca12a8025671c00381cc7/b8e10fea6717210d80256b7c005dca80?OpenDocument accessed 18 March 2002
AGRA
AGRA Inc. is a Canadian based engineering, construction and technology services company. On February 16, 2000 AGRA Inc. and AMEC Plc announced a merger agreement. The deal was completed on April 20, 2000 when AGRA officially changed its name to AMEC and adopted a new AMEC global brand identity. The combination of AGRA and AMEC significantly strengthened AMEC’s foothold in North America.[lxviii]
AMEC’s operating subsidiaries and related North American companies, including AGRA Earth and Environmental, AGRA Systems, AGRA Monenco, AGRA Simons, and Morse Diesel International Inc. initially continued to operate under their current names. They adopted the AMEC identity on January 1, 2001
AGRA Earth and Environmental
One of North America’s largest full service environmental consulting firms, having 18 offices in the United States, 42 in Canada and 5 in other nations[lxix]
AGRA Systems
Provider of professional IT solutions
AGRA Monenco
Engineering firm
AGRA Simons
A leader in the provision of engineering and project management services for the forestry, mining and consumer products industries.
Morse Diesel International Inc. [now AMEC Construction Management Inc.]
Morse Diesel International Inc. is one of the largest construction management and consulting companies in the world. The bulk of AMEC’s turnover in construction management comprises Morse Diesel’s activities in the US[lxx]
CEO Pete Mason (formerly President & CEO of AGRA), in conversation with The Wall Street Transcript, about the strategic thinking behind the merger with AGRA Inc.:
“One of the attractions of AGRA was that out of 6,500 employees it had 3,500 associated with the design process. In AGRA we see a leading North American professional services group, specialising in engineering and environmental activities, and it also has an advanced technology solutions business. AGRA brings a number of key industries to us, including oil and gas in North America, fine chemicals, consumer products, mining and forest products. So AGRA brought good design, systems skills and substantially increased the new AMEC in that regard.”[lxxi]
AGRA’s activities have included the following:
- Construction, as part of a consortium called Canadian Highway International Co., of the Highway 407, the first fully electronic toll expressway in Canada
- AGRA managed the construction of the Wolsong CANDO reactor in South Korea
- AGRA’s project management was selected for the Three Gorge hydroelectric project in China; assisting the gov’t with the forcible resettlement of 1.2 million people living in a densely populated area – the computer programme to manage this resettlement was provided by Monenco AGRA inc, a subsidiary of AGRA Industries[lxxii]
- AGRA won a $44m contract in Indonesia to manage a cellular phone explosion there.
References
[lxviii] ‘Agra officially changes its name to AMEC’, source: Alexander’s Gas and Oil Connections, Company News: Europe, Volume 5, issue 10, 09.06.2000, available online at: 09.06.2000www.gasandoil.com/goc/company/cne02346.htm, date viewed: 24.02.02
[lxix] ‘New Name, New Leader for AGRA Earth & Environmental’, source: Water and Wastewater.Com Newsletter, Vol. 2, No. 25, September 11, 2000. Available online at:
www.waterandwastewater.com/www_services/newsletter/september_11_2000.htm (date viewed: 24.02.02)
[lxx] ‘Knowledge, Innovation and Technology’, AMEC plc Annual Report and Accounts 2000, page 30
[lxxi] http://twst.com/notes/articles/kas001.html (source: The Wall Street Transcript, date viewed: 24.02.02)
Influence / Lobbying
Lobby Groups
AMEC’s involvement in UK-based lobby groups and industry associations
Below is a selection of the UK-based lobby groups and industry associations of which AMEC is a member, categorised by sector. It is by no means a complete overview:
Business: General
- Confederation of British Industry (CBI)
- Business Services Association (BSA)
- The Export Group for the Constructional Industries (EGCI)
- Construction Industry Council
- Strategic Forum for Construction
- The Civil Engineering Contractors Association (CECA)
- Institution of Civil Engineers (ICE)
- Design Build Foundation (DBF)
- Construction Industry Environmental Forum (CIEF)
Road building
- The British Roads Federation (BRF)
Nuclear industry
- British Nuclear Industry Forum (BNIF)
- British Nuclear Energy Society (BNES)
Airports One of AMEC’s specialities is airports. To advance its interests in the aviation industry, AMEC participates in the following lobby groups:
- The Airport Operators Association (AOA)
- Airports Council International (ACI)
- The British Airports Group (B.A.G.)
Links with the British government
The UK government is a major client of the construction industry. It accounts for 40% of the construction industry’s output and is supposed to regulate the industry at the same time. In addition, the government is funding the construction industry by providing money for R&D. It also supports construction projects in Eastern Europe and developing countries. There are many people holding high positions within both the British government (for example, within several of the government’s many Task Forces) and AMEC. This intimate and rather undefined relationship between AMEC and the British government can obviously lead to conflicting interests and (from the environment’s and public’s point of view) undesirable policy outcomes.
AMEC people with fingers in many pies include:
- AMEC CEO Peter Mason (see section on Board of Directors)
- AMEC director Liz Airey (see section on Board of Directors)
- Former chairman of AMEC plc Sir Alan Cockshaw
Cockshaw subsequently held the following positions: Chairman of the government’s commission for New Towns, which designates places for new construction; Chairman of the government agency English Partnerships, which helps ensure that new construction and property development meets public needs; On the board of the new Millennium Experience, the firm set up by the government to oversee Britain’s millennium celebrations, including the Millennium Dome.[xciii] Cockshaw has also been appointed Chairman of Manchester Millennium Ltd, the Task Force responsible for spearheading the City’s renewal programme.[xciv] In July 1999, British Airways appointed Cockshaw as Chairman Elect of its wholly owned subsidiary, British Airways Regional.[xcv]
AMEC part of the Government’s Advisory Elite AMEC participates in many Task Forces and ad hoc advisory groups, set up by the UK Government since 2nd May 1997. The government claims that Task Forces, ad hoc advisory groups and reviews provide independent, expert advice to the government on a wide range of important issues – including health, education, transport and crime. They are, the government says, an effective means of securing high quality advice on matters of real public concern and seek to operate in as open and transparent a fashion as possible. However, amicable government officials, corporate representatives and scientists, all sharing the same agenda, form an advisory elite, and dominate the Task Forces and advisory groups.
The ‘Task Forces, Ad Hoc Advisory Groups and Reviews: Annual Report 2000/2001’ can be found at: http://www.cabinet-office.gov.uk/central/2001/TaskForces.pdf
- Oil & Gas Industry Task Force
- AMEC and DTI
- Regeneration Task Force, Kosovo
- AMEC and Regeneration in the UK
AMEC participates in governmental bodies promoting big business
British Trade International (BTI) British Trade International is the UK government agency responsible for attracting inward investment through its Invest UK division and for promoting export through Trade Partners UK. AMEC CEO Peter Mason is member of the BTI board.[cii]
Website: http://www.tradepartners.gov.uk/
Trade Partners UK Trade Partners UK works alongside Invest UK within British Trade International (BTI) whose role is to foster business competitiveness by helping UK firms secure overseas sales and investments, and by attracting foreign direct investment. Trade Partners UK offers a “window on the world” for British companies through UK Embassies, High Commissions and Consulates around the globe and through Trade Partners UK offices in the UK. Ian Thomas – Business Development Director, AMEC plc – is member of Trade Partner’s Asia Pacific group.[ciii]
Website: http://www.tradepartners.gov.uk/
AMEC and the Private Finance Initiative (PFI)
AMEC is involved with eight Public Private Partnership (PPP) projects in roads, hospitals, water treatment and the public building sector.[civ]
The government’s Private Finance Initiative (PFI) has increasingly come under fire as evidence accumulates suggesting that PFI schemes are a waste of public money, fail to deliver, and basically represent a scandalous sale-out of public utilities.[cv] Still, the government and the main beneficiaries of PFI schemes – companies such as AMEC- keep pushing for PFI projects to go-ahead. AMEC CEO Peter Mason insists that “any disadvantages are outweighed by the private sector completing projects more efficiently and at lower cost.”
Mason advised Blair “to hold his nerve in the face of controversy on bringing private firms into the public sector.” AMEC is in the vanguard of bidders for PFI work, so it is unsurprising to find Mason a firm believer in the private sector’s role in public service reform. Last year Blair opened the new £87m Cumberland Infirmary, built by AMEC (see below). It has plenty more projects in the pipeline.[cvi] AMEC’s Investment Division, which consists mainly of its Public-Private-Partnerships, prospers.
The government hired PR firm Bell-Pottinger to promote its PFI schemes and generate public support. Bell-Pottinger assists the Public Policy Forum, which represents companies hoping to win PFI contracts, with a brief to ‘promote the benefits of PFIs’. Organisations involved in the PPP Forum Include AMEC, Bank of Ireland, Deutsche Bank, PriceWaterhouseCoopers and Balfour Beatty.[cvii]
AMEC and hospitals British Prime Minister Tony Blair opened the new Cumberland Infirmary in Carlisle in June 2000 – the first major district general hospital to be completed under the PFI. Financing, design and construction of the hospital was undertaken by an AMEC consortium, which will also provide non-clinical services for the next 30 years. An AMEC consortium also started work on the new University College London Hospital (during 2001). This is AMEC’s second major UK private finance hospital and includes the responsibility for non-clinical services for the next 40 years.[cviii] Shortly after the opening of the Cumberland Infirmary, the new hospital was labelled by various people (including a UNISON spokesman) as ‘the first PFI hospital disaster’ and was criticised for being ‘filthy, gloomy and chaotic’ (see Corporate Crime section). Meanwhile, AMEC’s share price soared.[cix]
AMEC’s Involvement in Road-building
UK’s first toll motorway AMEC is part of the consortium that is building the Birmingham Northern Relief Road (BNRR). Friends of the Earth argued that the road would destroy 27 miles of greenbelt land and two sites designated SSSIs (Sites of Special Scientific Interest).[cx]
Bingley Relief Road in Yorkshire AMEC is involved in the construction of the road. The road would cut through, according to Friends of the Earth UK, a 10,000year old fen mire and a SSSI.
A1(M) Alconbury to Peterborough, UK AMEC won the contract to design, build, finance and operate a major 30-year life maintenance scheme for the Highways Agency.
A419/A417 Swindon to Gloucester, UK AMEC has designed and constructed 26 kilometres of dual carriageway through a design, build, finance and operate scheme for the Highways Agency (30 year maintenance).[cxi]
AMEC and other public utilities
AMEC supports Railtrack Beleaguered Railtrack (a gov’t owned company set up in 1993) has been held up as an example of how relying on the private sector can go wrong. Yet the AMEC CEO Peter Mason remains convinced that not only was rail privatisation right, but so too was splitting track operation away from the train companies. He has some expertise on the subject as a major contractor to Railtrack and chairman of a British Trade International committee on the rail industry.[cxii] The fact that the British gov’t has recently been forced to spend an increasing amount of money on the railways should be good news for the three major Railtrack contractors: Balfour Beatty, AMEC and Jarvis.
AMEC and Airports One of AMEC’s specialties is airports. In 1995 and 1996, AMEC teamed up with the BAA (formerly the British Airport Authority) for a five-year partnership calling themselves The Pavement Team. The integrated team was responsible for the design, management and construction of projects at the airports. Within the partnership AMEC was responsible for the engineering and construction projects at Heathrow, Gatwick, Stansted and Southampton airports.[cxiii]
AMEC welcomed the news that the government had given approval for airport operator BAA to proceed with the development of a new fifth terminal at London’s Heathrow Airport. AMEC has been providing a range of ongoing engineering and construction services to BAA for nearly 10 years.[cxiv]
Publicly funded Research and Development
Construction research has long been perceived as an area deserving of government funding and promotion because of its important role in assisting a historically dysfunctional industry. In addition, the government generally believes that the construction industry (by producing more economically productive, sustainable and energy-efficient buildings and infrastructure) significantly contributes to boosting overall UK economic performance (including employment and attracting inward investment) and is therefore worth investing in.
The bulk of public-funded research reaches industry through the Department of Trade and Industry (DTI) and EPSRC (Engineering and Physical Sciences Research Council, the largest of the seven UK Research Councils). The European Community funds another (minor) proportion of research.[cxv] The UK government currently spends around £23 million per year in commissioning construction-related research and supporting innovation. The aims of this expenditure are to underpin the development of regulation and ensure safety and health in buildings and to support the sustainability and competitiveness of the UK construction industry. Currently around half of this expenditure is through the Building Research Establishment (BRE) – the majority in projects funded under the terms of the Framework Agreement that was put in place upon privatisation in 1997.
Sir John Fairclough, (former chief scientific adviser to the Cabinet Office, ex-Director of IBM UK laboratories, and former Chairman of the Engineering Council) has recently completed a report (Rethinking Construction Innovation and Research) on how to secure the right construction research skills and facilities for the future. The report, undertaken jointly on behalf of the DTI and the DTLR, has assessed what understanding, knowledge, skills and facilities in construction research are likely to be needed to meet the future requirements of government and industry, and how and where those competences are best supported.
The report was published on the 27th February 2002 and, among other things, urges the government to make an even stronger commitment to support and safeguard investment in construction research and development. AMEC’s Dr. Mike Murray was among the experts consulted during the course of the review.[cxvi]
The Contribution of Development Aid to AMEC Projects
· Loans From Export Credit Agencies The UK Export Credit Guarantee Department (ECGD) is a publicly backed government agency that gives financial guarantees to companies operating abroad.
The value of the investments and exports it underwrites far outstrips the UK’s bilateral aid budget. Basically, the ECGD is a source of taxpayer support for private sector companies seeking to off-load on to the public the financial risks of their business projects in the South and Eastern Europe. Until recently the ECGD lacked any mandatory environmental and development standards. The ECGD has backed many environmentally destructive, socially oppressive and, often, financially unviable projects.[cxvii] Nevertheless, the level of government funds available for subsidising British businesses carrying out overseas projects through the ECGD is set to rise from £500 million to £2.1 billion between the current financial year and 2003/04.[cxviii]
The ECGD offers very attractive schemes for industry. Corporations involved in big infrastructure projects (such as AMEC) are among the main beneficiaries, since large proportions of development aid are historically directed towards energy and construction. In 1997/98, AMEC was the 7th largest recipient of support from the government’s ECGD, receiving £80 million for construction work in Hong Kong. The trade body to which AMEC belongs – the Export Group for the Construction Industries- has lobbied against the imposition of environment and human rights conditions on the ECGD’s loans.[cxix]
Executives connected with companies that benefit from its guarantees heavily influence the ECGD. AMEC’s director Liz Airey currently chairs the Export Guarantees Advisory Council, which meets to help Trade ministers make export credit decisions. She became chairman in December 2001. Other members of the council are Sir David Wright (Chief Executive, British Trade International) and John Armitt (CEO Railtrack plc).[cxx] AMEC CEO Peter Mason has also been a member.
· Grants From Development Agencies On 12 June 2000, the Canadian International Development Agency (CIDA) agreed to pay AMEC’s subsidiary AGRA Inc. a $250,000 grant to do assessments in Belize where another huge hydroelectric dam -the Chalillo Dam- is due to be built (see Corporate Crime section).
References [xcii] ‘About the BNIF’, BNIF website: www.bnif.co.uk/about/about.shtml accessed 5 March 2002
[xciii] ‘Captive State, the corporate takeover of Britain’ (2000), by George Monbiot
[xciv] ‘Bridging the Gap’, Manchester Evening News, 25 November 1999, website: www.rebuilding-manchester.co.uk/articles/1999/1999art01.htm accessed 19 March 2002
[xcv] New chairman for Regional Subsidiary’, BA press release, 6 July 1999, BA website: www.british-airways.com/inside/media/archive/1999/9907/19990706_124.shtml accessed 19 March 2002
[xcvi] Red Star Research, website: www.red-star-research.org.uk/subframe2.html accessed 19 March 2002
[xcvii] The Campaign for Freedom of Information, web site: www.cfoi.org.uk/secondeesdti.htmwww.cfoi.org.uk/secondeesdti.htm> accessed 19 April 2002
[xcviii] BBC News, 15 June 1999
[xcix]’Government Review of Policies Relating to the Historic Environment’, Council for British Archaeology, CBA website: www.britarch.ac.uk/info/ehreview12.html accessed 19 March 2002
[c] AMEC Annual Report and Accounts 2001, page 3
[ci] Overview of AMEC’s activities, categorized by market sector, the public sector, AMEC website: www.amec.com/ourservices/level3services.asp?pageid=14 accessed 19.03.2002
[cii] ‘News Releases’, the Department of Enterprise, Trade and Investment website: www.northernireland.gov.uk/press/eti/010924c-eti.htm accessed 5 March 2002
[ciii] ‘Area Advisory Groups: An Introduction’, Trade Partners UK website: www.tradepartners.gov.uk/who_we_are/aag/advisory_groups/introduction.shtml accessed 7 March 2002
[civ] AMEC Annual Report and Accounts 2001, page 3
[cv] Read all about PFIs in ‘Captive State, the corporate takeover of Britain’ (2000), by George Monbiot, London: Macmillan Publishers Ltd.
[cvi] ‘Railtrack is still a good idea’, The City Interview, Daily Mail, 28 June 2001, website:
www.thisismoney.com/20010628/nm34242.html accessed 19 March 2002
[cvii] ‘Gov’t hires PR firm to promote PFIs’, The Guardian, 23.08.01
[cviii] ‘Innovation’, AMEC website: www.amec.com/aboutamec/level2about.asp?PageID=170 accessed 19 March 2002
[cix] ‘Bed crisis – in August?’, The Observer, 27 August 2000, Guardian website: http://society.guardian.co.uk/privatefinance/story/0,8150,393580,00.html accessed 19 March 2002
[cx] Earth Matters, Issue No. 48 Spring 2001 Page No. 10, author: Friends of the Earth
[cxi] ‘Our Services’, AMEC website: www.amec.com/ourservices/level3services.asp?pageid=14 accessed 19 March 2002
[cxii] ‘Railtrack is still a good idea’, The City Interview, Daily Mail, 28 June 2001, website:
www.thisismoney.com/20010628/nm34242.html accessed 19 March 2002
[cxiii] ‘BAA & AMEC -The Pavement Team, Gomaco, The World-Wide Leader in Concrete Paving Technology, Gomaco website: www.gomaco.com/Resources/worldstories/world27_3/amecairport.html accessed 19 March 2002
[cxiv]’AMEC Welcomes Approval for New Fifth Terminal at Heathrow’, AMEC Media Release, 20 November 2001, AMEC website: www.amec.com/news/mediarelease.asp?MediaID=286 accessed 19 March 2002
[cxv] ‘Written contributions for Sir John Fairclough’s Review of Construction Competences’, DTI website: www.dti.gov.uk/construction/rcf.html accessed 6 March 2002
[cxvi] A pdf version of the full report is available to view online at: www.dti.gov.uk/construction/pdf/fcloughrpdf or can be requested from the Construction Industry Directorate of the DTI on 020 7215 0848 or email: contruction.research@dti.gov.uk [cxvii] ‘Snouts in the Trough, Export Credit Agencies, Corporate Welfare and Policy Incoherence’, The CornerHouse, Briefing 14, June 1999
[cxviii] ‘ECGD funding boost’, expNews, published 2 January 2002, expNews website: www.epolitix.com/bos/epxnews/aa651de76949d149a1edb09947464bd80000002e4731.htm accessed 7 March 2002
[cxix] ‘Captive State, the corporate takeover of Britain’, by George Monbiot (2000), London: Macmillan Publishers Ltd., page 221
[cxx] ‘Export Guarantees Advisory Council’, ECGD website: www.ecgd.gov.uk/graphic/whoisecgd/advcouncilint.asp accessed 6 March 2002