The busiest airport in the North is set to expand to accommodate the surge of passengers expected by 2005. But contractors working on its £500m construction plans have found that it can be a very bumpy ride.
Manchester Airport has a reputation for being one of Britain's toughest construction clients – a fact borne out by the disputes that have accompanied its last two major terminal projects. But with £500m to spend on construction over the next 10 years, the client can afford to drive hard bargains, even if these dismay the local construction firms that look to the airport for work.

The most recent controversy blew up last month when Niwel, a contractor based in the Manchester suburb of Levenshulme, went into liquidation as a result of payment problems on its blockwork contract for the £100m Terminal 1 British Airways project. Niwel blamed construction manager Bovis for its demise, as it was responsible for certifying payments on the project. However, Bovis itself is understood to have suffered financially from the terminal scheme.

Climbing costs

Manchester Airport remains non-committal on the Niwel affair. A spokesman says: "Bovis is the construction manager on the Terminal 1 British Airways project. As such, it is responsible for certifying work for payment by Manchester Airport plc. As far as we are aware, Niwel was paid all the money it was owed before it went into liquidation. If Niwel or the liquidators feel there are any outstanding financial claims, they should contact us so we can raise the matter for investigation by Bovis." The context for Niwel's liquidation is one of tension, with disputes arising over the project's final cost. The airport's director of customer services, David Teale, oversees the airport's construction arm. When asked about cost escalation, he said: "I don't want to go into detail about budgets – we'll go into that with Bovis. We said: 'Here's a budget, please manage within it.' If they haven't been able to, we'll want to know why." Manchester construction sources say the main problem with the project was the need to keep the existing terminal building open while work was done on its replacement.

Teale said: "The terminal was a tough assignment – it opened slightly behind schedule. In terms of design, it is stunning, but there were teething problems. Some bits were not completed on time, although there was nothing that impaired operations.

"The project has certainly been difficult. The board insisted on an operational plan for customers so the building could remain open while work continued, and people are generally tolerant. But contractors have to recognise that they can't always drill out concrete when we are at our busiest." An additional difficulty was the fact that project QS and cost watchdog Turner & Townsend was employed through the terminal's designer, Nicholas Grimshaw & Partners, rather than reporting directly to the client.

Local industry sources complain that the airport is wringing every ounce of advantage from its dominant position in the local economy. One says: "They are not the easiest people to work with. Their reputation with contractors, subcontractors and consultants is of not treating them well." Another speculates mischievously that the airport's chief executive, engineer Geoff Muirhead, is a poacher-turned-gamekeeper who is using his experience of how the industry actually works to turn the screw on his contractors.

But, as Teale says, the airport has to protect itself commercially. "Of course we are commercial, but so are people in construction. We think we're a good client. We make it very clear what we want and we expect people to deliver," he comments. And even though the airport is highly profitable, making £33m before tax on turnover of £231m in 1997/98, the speed of its expansion means it needs to issue £24m in new shares to its shareholders this spring. Its shareholders are the city council and nine other local authorities.

Customer demand set to take off

Manchester Airport are not the easiest people to work with. Their reputation with contractors, subcontractors and consultants is of not treating them well

Local contractor

Part of the pressure on the airport is that its 20 million annual passenger capacity will have to rise to 30 million by 2005. At present, there are 20 million people within two hours' drive. This is expected to rise fast as Manchester adds new international routes – a Japanese link is being targeted – and Heathrow and other rivals buckle under increased demand.

Expansion is in full spate. A new runway being built by Amec and Tarmac is well under way, and architect Nick Derbyshire has been commissioned to study the feasibility of a new rail and bus interchange to help handle what could eventually be a 30 000-strong workforce. An extension of the Metrolink from the city centre to the airport is also planned.

Terminal 2, with temporary walls that can be removed to allow expansion, is earmarked for growth, and there are new hotels planned for other land owned by the airport.

Giant new maintenance hangars are also in the pipeline, and there is always the chance that other airlines will follow BA in asking the airport to provide new facilities for them.

Travelling new paths of commission

With expansion inevitable, how will Manchester Airport go about commissioning the work? Teale says that, having used management contracting via Amec on Terminal 2, construction management on Terminal 1 British Airways, and design and build on the new runway, it is exploring new routes.

Amey recently began work on new taxiways between old and new runways on a partnering basis, and Teale says he is "personally very interested in this procurement route". He has even discussed it with one of its fans, Sir Michael Latham.

Like BAA, Manchester Airport is also studying framework agreements based on close co-operation with suppliers for design and project management work. "We get reasonable value now, but we are always looking for more," Teale says.