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Heathrow expansion: Suppliers called on to shape offsite strategy

Heathrow’s network of regional logistics hubs is likely to consist of mixed-use sites for construction, which will change throughout the process of the airport’s expansion.

Heathrow commercial delivery director Emma-Jane Houghton told Construction News that the varying needs of the complex project, which is due to include the opening of a new runway in 2026, will likely mean that the function of the hubs changes during the project.

Ms Houghton said: “The hubs will be mixed-use and flexible over the duration of the construction programme. We will talk to the experts in the market to see how we best use them and they will likely change over time.”

A logistics hub information day will be held by the airport owners on 16 October ahead of the release of an invitation to tender.

In March, a shortlist of 18 potential sites was drawn up, which included British Steel’s Scunthorpe base and Glasgow’s Prestwick Airport. Contracts will be awarded to the final four early next year.

Plans for the extension include the creation of a third runway and the rerouting of the M25 under a tunnel to make way for it. The A4 and A3044 roads will also be diverted, while a road tunnel to the central terminal and a terminal 5 extension are also included in the Heathrow masterplan.

The airport recently held a supplier conference in Birmingham where suppliers were asked how the client could “leverage [their] potential”.

Ms Houghton, who joined Heathrow from KPMG earlier this year, said: “I’ve been critical of things I’ve worked on in the past where you say market engagement and it’s just a bit of market research that isn’t particularly accessible.”

She said there were 350 delegates at the event from across the UK and ranging from SMEs to major companies.

“We gave all of our suppliers the opportunity to say what they thought of the day and people said it was refreshing to see a client coming out to the market without having already decided what they want beforehand,” she said.

Despite that, the team behind the project does have ideas about things required of those bidding for work.

“We’ve got to move away from the approaches ingrained in many organisations and supply chains where it’s focused on initial capital cost,” she said. “We’re focused on procuring for value against a broad range of attributes on a balanced scorecard.”

These attributes will include putting factors including sustainability, digital attributes, and health and safety “on an equal footing with the financial rather than the traditional focus on cost”.

Asked by CN if this meant bidders would be scored 25 per cent on cost and equally for the other examples cited, she replied: “I wouldn’t commit to [exactly] those at the moment but the principle is sound.”

A detailed procurement strategy will be finalised in March 2020, with bidding to follow afterwards.

The supplier event was designed to “allow confidence” about Heathrow as a client and to show “that this is happening, that we’re moving into the delivery phase”, she said.

Legal proceedings against the decision to allow construction of the airport’s new runway to go ahead are however due to start in late October, however.

The Court of Appeal will hear challenges to a decision not to allow judicial review of the government’s decision to green-light the project, from those behind a rival plan for expanding the airport, councils and environmental groups against the plan.

Before the appeal was launched, a spokesman for Heathrow described a court decision not to allow the judicial review as a chance to continue the “once-in-a-generation project that will connect Britain to global growth, providing thousands of new jobs and an economic boost for this country and its future generations”.

Asked by CN if suppliers had told her of the importance of Heathrow expansion going ahead given the difficulties faced by several other UK infrastructure projects, Ms Houghton said that the most important thing about the conference was the opportunity for the company to sell itself to those who might be working on the project.

“The way I see it is if we’re going to get this right and [work with] the best suppliers and build a legacy of what we’re able [to achieve] with a UK supplier base, the onus is on us to demonstrate why we’re a good partner of choice for them.”

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