Paul Neto leads Vinci Construction UK’s crack special projects squad, which is only interested in the big stuff - major contracts and closing a mighty drop in profits. Portrait by James Bolton
There is more to Vinci Construction UK than meets the eye. A man called Paul Neto for one. He heads a team that was set up five years ago to support the £1.1bn contractor’s building arm - the part of the business that has traditionally made up the lion’s share of work, but the one suffering the most in the tough economic climate compared to Vinci’s civil engineering and facilities divisions.
Neto has been managing director of Vinci Construction UK Special Projects since August 2011. The 14-strong core team looks exclusively at front-end procurement, specialising in providing funding or investment, procuring projects over £100m and major frameworks. Once won, they hand over the schemes to the regions to deliver.
This is a crack team, brought together solely to focus on winning billions of pounds of work, adding to Neto’s “opportunity hopper”, which stands at between £1bn and £2bn at any one time.
Despite the increasingly tough climate for contractors, Neto is convinced he can continue to deliver, even with the public sector cuts: “Times are certainly tough,” he says. “But that’s why we were brought in - to focus on winning work and support the group’s UK building division.”
Furthermore, passing the projects to the regions, and bidding for large framework schemes with work all over the country, means that it is not just London-based firms that benefit from the spoils.
Neto’s hope is for the division to be recognised industry wide: “I want people to say: ‘Vinci Special Projects has won a project’ rather than ‘Vinci has won a project’ so people realise what a difference we make.”
That’s the big question. How much of a difference does the 41-year-old and his team make? Here we find out how far Neto plans to expand the division, whom he wants to work with and how regional SMEs are benefiting from the Special Projects way of working.
Vinci saw its UK pre-tax profit fall 48% over the past year - from £39m in 2010 to £19.8m last year as a result of the “difficult economic climate”, although turnover for the firm was up 8% to £1.11bn in results for the year to 31 December 2011. The turnover increase mainly comprised growth in the firm’s Taylor Woodrow Division in civil engineering.
The firm’s order book stands at an impressive £1.3bn, with health, education and retail contributing over 75% of contract wins in 2011. And
this is where Special Projects comes in.
The Special Projects division is solely focused on projects over £100m or on frameworks. Procure 21 + and the Ministry of Justice frameworks have been particularly lucrative for the group, bringing in £250m over the past two years.
And he isn’t too bothered about more public sector cuts or the NHS reforms as the pipeline of work in these sectors looks healthy: “We are the only contractor on all four MoJ frameworks and we have built up a strong reputation on Procure 21+, particularly in the north.
“I am not noticing work drying up, especially in the health sector as we spread our bids across public and private, working for private healthcare facilities developers like Circle, and adapting to bid for work where opportunities are increasing, like care homes.”
The majority of the £1bn-£2bn work available goes to the regions: “One of the fundamental reasons for having this division is to let regions focus on delivering their business targets.
“The special projects team is made up of experienced work winners but the jobs are then passed to the regions. We don’t have a long list of projects in London and the South East, which is very unusual for a major contractor currently, especially when 35% of GDP is in this region.”
Engagement with regions starts early to draw on local expertise and contacts: “As much as we will be talking to clients and consultants, the regions will be feeding in. They will be having conversations with local clients and may say: ‘Hey Paul, I have found an opportunity here, can you help?’ So we don’t end up sitting in Watford trying to hunt something down in Warrington.”
Work up for grabs
It follows on that with 60% of the work in the regions outside of London, that’s where most of the opportunities for suppliers, and particularly consultants, are. “There are always opportunities for new firms,” says Neto. “And the regions will obviously continue to develop new relationships all over the UK. So a regional office can say ‘I think this consulting engineer would be good’ and being down South we might not know that. So we have a broader reach of potential new firms, inlcluding SMEs accross the country. It’s a very open door.”
Open as long as you can deliver what Neto is looking for: “For me, a lot of it is down to a gut feeling. But also a track record, a strong, reliable organisation that will deliver.” And with Vinci’s BIM team sitting under the special projects umbrella, being technologically advanced helps too
With energy and infrastructure looking like the major areas of work over the next three to five years, is Neto concerned about the future of the group’s Building division, with or without the support of special projects? “No. We are here for the very reason to support that side of the business and we’re doing well. Plus, infrastructure may be where the growth is but each of those projects have building elements. And we will expand across the business divisions where there is an opportunity.”
And those opportunities look set to go global: “We want to explore how we can engage with other parts of the Vinci Group to learn from, and help, companies where we have expertise. I want to build up a far-reaching body of work to become the benchmark that all of our peers are measured against. That would be ultimate goal. The pinnacle.”