Sir Michael Latham An overall site agreement for the Olympic park would help bring the project in on budget. But it’s going to be up to contractors and unions to see if they can set one up
In my column on 25 January, I wrote about the need for an overall site agreement on the Olympic park. I pointed out that there were a number of significant Olympic Delivery Authority (ODA) projects all within a few hundred yards of each other, and the Olympic village was also near. I was concerned that there would be leapfrog claims from different sectors of people working on the site. I also remembered an excellent lecture that a prominent Olympian gave to the Worshipful Company of Constructors at City University, London, a year ago. At discussion time, he was asked a direct question from one of the audience, all of whom were construction
professionals, academics or students at the university. The question was: “Will the Olympics come in on time and to budget?” The Olympian hesitated, and then replied “They will certainly be on time.” That was the whole of his answer.
A couple of months ago, I led a deputation of employers, trade union leaders and professional negotiators to the ODA to discuss the possibility of an overall site agreement on the Olympic park, with the Major Projects Agreement for the mechanical, electrical and plumbing sectors being part of it. At the meeting, the ODA leaders made it quite clear to the deputation that that was not their intention. They said they did not intend to lay down such a requirement. It was up to the contractors to sort it out with their subcontractors and their workforce. When we referred to previous projects that had been subject to essential completion time limits, such as the Jubilee line extension, and that had experienced industrial relations problems, the ODA leaders felt that lessons had been learned by the industry and things had moved on since then. That decision has been publicised by the ODA, and is well known to the industry.
I can understand their viewpoint, though I remain concerned about the possible outcome. However, that is their decision, and the industry must live with it. So, what can the individual contractors do? The memorandum of agreement that the ODA has signed with the trade unions is a useful document. It lists the national industrial agreements signed by employers and unions which will be relevant to the Olympic park. But the likelihood is that nobody on site will actually be paid the nationally negotiated figure for their trade. They will all be getting several pounds an hour more than that, especially as the time gets nearer to the required completion date. So, the main contractors – hopefully also including their specialist contractors – ought to meet with the trade unions to see if they can establish an overall site agreement of their own for the Olympic park and the nearby village.
All on site will know of other projects being built within a few miles of the Olympic park. This will be a motivating factor for the workforce to be comparing wage rates or even moving on to another site
All on site will know that there will be other significant projects being built within a few miles of the Olympic park that will be requiring a workforce and site management of their own. There will be no shortage of information about what is happening a few hundred yards away, or even a few miles away, and this will be a motivating factor for some of the workforce to be comparing wage rates or even moving on to another site.
It was to avoid the disasters that occurred in power station construction in the early seventies that the National Agreement for the Engineering Construction Industry was devised, and I believe we will need a similar arrangement for the Olympic park. It is no secret that several of the trade union leaders have wanted such an overall site agreement, and I am sure that they could respond positively to a collective approach from the contractors.
It is vital for Britain, and for the construction industry, that the Olympic park is well built. Our industry has much to be proud of, and this is a large project of worldwide interest and comment. The construction of Heathrow Terminal 5 to time and cost has undoubtedly been overshadowed by its operational problems. However, these difficulties are now being overcome and BAA, its suppliers and the workforce deserve great credit for their achievements. The Olympic park must be working well many weeks before the opening of the Games in 2012. Otherwise, we would be the laughing stock of the world – and that must not happen.