{"id":505625,"date":"2024-09-11T09:59:12","date_gmt":"2024-09-11T08:59:12","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=505625"},"modified":"2024-09-16T16:31:53","modified_gmt":"2024-09-16T15:31:53","slug":"evolution-not-revolution-what-laing-orourkes-new-ceo-will-bring-from-australia","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/contractors\/laing-orourke\/evolution-not-revolution-what-laing-orourkes-new-ceo-will-bring-from-australia-11-09-2024\/","title":{"rendered":"\u2018Evolution, not revolution\u2019: What Laing O’Rourke’s new CEO will bring from Australia"},"content":{"rendered":"

He may have spent 13 years running Laing O\u2019Rourke\u2019s operations in Australia, but Cathal O\u2019Rourke\u2019s accent does not have an Aussie twang. He has been at the helm of the UK\u2019s biggest private contractor since July, when he took over from his father, Ray O’Rourke,<\/a> who founded the firm back in 1977.<\/p>\n

Construction News <\/em>sat down with him for the first time since that big transition took place at the firm<\/a>.<\/p>\n

There is a \u201cquid pro quo\u201d moving from Australia to the UK, he said, following the firm\u2019s successful return to profit<\/a>. When CN <\/em>asked what lessons or benefits he could bring from Australia to the UK, he smiled.<\/p>\n

\u201cIt\u2019s funny,\u201d O\u2019Rourke said. \u201cThe Australian markets are often looking back here to try and learn as well.\u201d<\/p>\n

He characterised his approach to taking over the contractor as \u201cevolution rather than revolution\u201d.<\/p>\n

\u201cI don\u2019t think I have brought a single new system into play,\u201d he said. \u201cI want us to maximize the opportunity we have inside the systems that we have today, which are really robust and really strong.\u201d<\/p>\n

But he also reflected on the differences between the Australian and UK sectors.<\/p>\n

Returning to a non-federal country means not having to work in multiple regulatory systems all the time, for instance.<\/p>\n

\u201cA lot of our work in Australia was on government contracts, and you\u2019ve got the different states,\u201d he said.<\/p>\n

\u201cYou\u2019re trying to get what we call a harmonised approach \u2013 we\u2019d have standards across each of the different states, and you\u2019re trying to get them to be the same across the whole country. So that was a challenge.\u201d<\/p>\n

But Australia\u2019s construction industry has already confronted the shared risk discussion, he said, which he predicted will soon come to the UK.<\/p>\n

\u201cThe opportunity for more collaboration, shared outcomes and shared risk was a journey we went on in Australia that I see playing out in parts of the market here,\u201d O\u2019Rourke said.<\/p>\n

In particular, he pointed to sharing the risk of inflation between the client and contractor.<\/p>\n

\u201cWe can\u2019t control [inflation], and the risks are just proportionate. So I think that\u2019s where the conversation should be had, and the risk should be shared.\u201d<\/p>\n

MMC commitment<\/h3>\n

O\u2019Rourke remained steadfast on the contractor\u2019s focus on offsite construction, arguing that it \u201cprovides better certainty and outcomes on projects for customers\u201d.<\/p>\n

\u201cWhen you look at the challenges that we\u2019re facing in the industry, against carbon, against an ageing workforce, all of those things \u2013 we have to come up with ways to do things differently, because the workload, if anything, is lifting,\u201d he said.<\/p>\n

He also argued that the automation involved in modern methods of construction (MMC) could drive investment both from banks and private equity, as happens in manufacturing.<\/p>\n

\u201cAt the moment, construction isn\u2019t seen as a very appealing investment opportunity, whether that\u2019s through equity or from banks. So you\u2019ve got to look at how you deliver this [investment], and you\u2019ve got to look at the system holistically to make sure that you actually go after [the investment]. Everybody wants the prize at the back end, which is a more innovative and automated system which also drives that cost benefit.<\/p>\n

“But people aren\u2019t prepared to do their bit at the front end that enables it, so that\u2019s what we\u2019re driving towards [by using MMC].\u201d<\/p>\n

O\u2019Rourke acknowledged that the 60 redundancies made at the organisation\u2019s offsite factory<\/a> in Nottinghamshire earlier this year showed it faced a \u201cvolatile workflow\u201d at the factory.<\/p>\n

But he said there was an \u201cextensive rehire\u201d the next month, when demand peaked again. He also accepted that was not ideal in terms of costs and efficiencies.<\/p>\n

\u201cThat\u2019s where we need to be smarter with the whole of the programme, especially government work. That\u2019s an opportunity.\u201d<\/p>\n

Calling for PFI changes<\/h3>\n

O\u2019Rourke further echoed his firm\u2019s support for public-private agreements to boost funding for the sector<\/a>, as the public purse faces a financial squeeze.<\/p>\n

He called for innovation in public-private agreements to boost investment, warning that the current model \u201cdoesn\u2019t achieve the right risk balance\u201d.<\/p>\n

\u201cI know that investors will want to come in, they want to be guaranteed their returns. I think that\u2019s driven the risk too far into the contracting side,\u201d he said.<\/p>\n

Instead, he called for a way to \u201cbridge that middle piece\u201d, which could involve the government taking on some of the risk \u2013 as in Australia, where the government builds projects taking on the full risk, and then sells to the private sector.<\/p>\n

The sector has already been experiencing a high volume of administrations, with experts warning in July that they are set to remain high until the impact of the government\u2019s<\/a> infrastructure plans are felt.<\/p>\n

O\u2019Rourke warned that changing the PFI model is urgent to keep more contractors interested in the PFI model, and to make it financially sustainable for them.<\/p>\n

\u201cThat has to be resolved, or we\u2019re going to end up with more risk transfer onto contractors, which they can\u2019t bear financially,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"

He may have spent 13 years running Laing O\u2019Rourke\u2019s operations in Australia, but Cathal O\u2019Rourke\u2019s accent does not have an Aussie twang. He has been at the helm of the UK\u2019s biggest private contractor since July, when he took over from his father, Ray O’Rourke, who founded the firm back in 1977. Construction News sat …<\/p>\n","protected":false},"author":90643,"featured_media":475479,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[552,570,537],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n