29th January 2016

UK Construction Industry: four huge upcoming projects

Many of our construction accounting software users work on relatively small scale local infrastructure projects that provide immediate benefits to the area, with a reasonably quick turnaround. 

UK Construction Industry: four huge upcoming projects

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 Conversely, major infrastructure projects almost always become administrative and planning nightmares, often taking decades to make it from the drawing board through to completion. However, these megaprojects provide thousands of jobs in the construction industry and often lead to hundreds of long term maintenance roles. We examine some of the biggest projects on the horizon in the UK.

Restoration of the Houses of Parliament

The Palace of Westminster as we know it today was rebuilt in the mid-1850s due to fire, and it took a bit of beating in the Blitz. Over recent decades it’s become clear that the buildings are in need of significant restoration and renewal – but managing the restoration of one of the most important locations in the country will be no mean feat. An independent report predicted that the restoration would cost £5.7 billion and take 32 years to complete if the Houses remained occupied, and £3.5 billion and 6 years if the MPs and Lords temporarily relocated. There would also be the option to add new conference and media facilities, plus making overall improvements in accessibility. Clearly this task is gargantuan, and only a brave (or foolish) government would give the go ahead to such a costly scheme during a period of austerity.

High Speed 2 (HS2)

It’s been estimated to cost between £43-80 billion and is arguably the most controversial transport infrastructure project in recent decades. HS2 has been in the works since 2009, and after years of planning, protests and political football, construction may finally begin in 2017. The high speed railway line will cut the time taken to reach London from Birmingham by half an hour. Phase 2 of the project will extend the line from Birmingham to Manchester. Over 400 houses will be destroyed for the new line, including nine Grade II listed buildings, and 33 ancient woodlands will be destroyed, damaged or bisected. It’s a controversial project that we’ll only be hearing more about in the press over the coming years – the first phase isn’t due to be completed until the mid-2020s – and that’s assuming there are no more delays.

New runway at Heathrow or Gatwick

Heathrow operates at 98% capacity – and as London continues to thrive as a business and tourism destination, as well as a capital city, it won’t be long until new capacity is required. Adding a runway to an existing London airport is certainly preferable (and easier) than building an entirely new site, and Heathrow is the prime candidate for expansion. A third runway at Heathrow was first announced in 2009, with its opening due in 2015 – but the coalition government canned the plan upon their election. It is estimated that every year the runway is delayed costs the UK approximately £1 billion in lost business, so it’s little surprise that the idea hasn’t been put to bed. The Airports Commission published its report on the options for expansion at Heathrow and Gatwick in 2015, and concluded that a third runway and sixth terminal at Heathrow was the preferable option, predicting a total cost of £18.6 billion. The government is delaying a decision on the project until summer 2016. 

Thames Tideway Scheme

The Thames Tideway Scheme is a little less glamorous than the other major projects we’ve explored in this article, but no less important. London’s 150 year old sewer system is no longer fit for purpose – the population of London has quadrupled since Sir Joseph Bazalgette’s innovative system was first constructed. At present, when there are high volumes of sewage the overflow goes into the Thames. When the 25 km tunnel is constructed, the overflow will be redirected to Beckton sewage treatment works instead of polluting the river. The project is the largest ever infrastructure project to be carried out by the UK’s water industry and is predicted to cost between £4-4.6 billion. Construction began in December 2015.

Whether your average job is a small housing development or an international infrastructure, your accounting system needs to be able to keep up. Is it time you upgraded our construction accounting software.

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