“The sector needs to shift from a confrontational way of working to a collaborative model”
Alasdair Henderson, Executive Director, BAM Ireland, speaks with BARRY MCCALL about how BAM Ireland is embedding sustainable practices across its operations, and he calls for a more cross-sector coordinated approach if Irish construction is to reduce its carbon footprint.
Sustainability, construction procurement reform, talent attraction and retention are top agenda items for BAM Ireland Executive Director Alasdair Henderson as he moves into his second year in the role. “I came into the business in April 2022, an interesting year for everyone in construction for obvious reasons,” he says. “The inflationary environment, among other things, made it very challenging. We did have a successful year. We delivered what we wanted to and served our customers very well. This year, we are continuing on our journey to becoming a customer-centric business, which is the BAM model.”
Some structural changes have been made to the business since his arrival.
“We are embedding sustainable practices into the business. Decarbonisation and biodiversity are really high priorities for us. It’s not just about reducing harm but trying to have a net gain for nature from our projects. Everyone focuses on decarbonisation, but you can’t talk about the climate emergency without talking about biodiversity at the same time.”
Sustainability in BAM projects
He points to a number of BAM projects that have sustainability at their core. The €170m North Quays Public Infrastructure Project in Waterford for Waterford City and County Council involves the construction of enhanced multi-modal access routes, an integrated transport hub, including the moving of Waterford’s Plunkett train station to a more convenient location, and a sustainable transport bridge. The sustainable transport bridge will link the reallocated train station to new walking and cycling infrastructure.
“Our site there is set up to be as sustainable as possible with simple things like a private wire connection to solar power generation and EV charging points for staff,” he says.
“Elsewhere, on another site, the Derrinlough wind farm in Offaly comprises 21 turbines, which will have a maximum export capacity of 105 megawatts (MW), Bord na Mona has moved from a company exploiting peat to preserving it, that’s great to see.
“The 253-apartment Greenacres development in Kilmacud, Dublin, is one of Ireland’s first blue roof residential projects. The blue roof is a new sustainable urban drainage technology, designed to attenuate and manage rainwater at roof level via a restrictive flow outlet.
“Benefits of the system beneath a green roof vegetation finish include improved urban biodiversity on site; reduction in the discharge of rainwater, which drastically mitigates the risk of localised flooding; helps increase the quality of the water going back into the system; and helps improve the performance of a building by acting as an insulator in winter.”
A new 16-classroom Ballinteer Educate Together National School (ETNS) in south Dublin will feature a green roof.
“When you look at what the built environment can contain, you can build in so much else,” Henderson notes. “It’s really exciting.”
Focus on biodiversity
Emphasising the urgency of the situation, he points out that Ireland and the UK are ranked in the bottom 10 globally when it comes to biodiversity performance.
“That’s largely to do with land use. We need to do it differently. We need to grow economically but not at the cost of nature. This is far from a utopian idea. Changes in extreme weather events are happening right now. Last November, a rainfall event affected the M11 when it overloaded the drainage network. Infrastructure installed over the past 20 to 40 years is starting to be overwhelmed by weather events.”
It’s not all bad news, though, and there are opportunities for quick wins. “We are creating biodiverse landscapes instead of managed cultivated landscapes around new developments. That means allowing things to be messy and letting fallen trees decay. We must educate our people to understand that acres of sculpted grasses and flower beds are no longer best practice. Best practice looks different now.”
Hydrogenated vegetable oil offers another opportunity. “It is incredibly important,” he contends. “It can reduce the CO2 output of fuel by 90%. The industry doesn’t have a great record of doing things voluntarily, but the government could mandate HVO use in public contracts, which would have a major impact. An excise duty reduction on HVO would be great. That would improve the economic aspects of using it.”
Safety leadership at BAM
Safety is another priority.
“Safety leadership is critical to us. I don’t like standing at the stern looking at the wake. I want to stand at the bow and look ahead. We are building a safety culture in the business. We are not just asking people to commit to site safety; we are asking everyone to think about getting to and from work safely every day. The incident rate has reduced by a third in just a year.”
Diversity & inclusion
There has also been a strong focus on improving inclusion and diversity at BAM.
“We have moved that on. We had our first gender pay gap reporting in Ireland, and that highlighted issues across the industry. We need to address gender inequality in the industry. We need to do that to get the best people in. I sponsor the company’s Gender Action Network across the UK and Ireland, and there are many interesting things going on with that.”
Technology at BAM
BAM’s Irish business is in a good place when it comes to technology.
“When I came to Ireland, I found a business with really high technological capability, the best in the global group. We have been exporting that ability to other areas of the group.”
One example of that capability is the real-time digital twinning in use at the New Children’s Hospital project.
“This enables real-time monitoring and efficiency at the construction and operational phases. It’s remarkable to see what can be achieved with the data generated. People can get excited about digital twinning in terms of clash avoidance and so on. But when you get into the real-time space, you have an extraordinary level of control over what is being done and used.
“The efficiencies offered by technology will be important in addressing future needs.”
Public works procurement
“Ireland’s rapid growth in population is pretty unique in Europe. That requires modernisation of health, education, and housing estates,” Alasdair Henderson continues. “There is a need to understand how land use needs to change. These are social and societal issues. It’s not just about the need to build more houses. We need to look ahead to the next three years and plan now. That means working with contractors and designers to get around the challenges and get a common view of the best project outcomes.”
He believes that will require a change of approach for the industry and its clients.
“Construction has been a transactional industry in the past,” he notes. “A longer-term, more relationship-based procurement model is required. Such a model would lead to the best outcomes.”
He points to research into global construction project outcomes carried out by a Danish academic in 2022 to underline his point. “The proportion of projects delivered on time is 50%. And the proportion delivered on time and on budget is just 20%. The proportion that also delivers the desired outcomes is an extraordinarily low number. That is no great advert for the current system.”
Reforming the approach to public works procurement will be crucially important to the achievement of Climate Action Plan targets as well as the National Development Plan.
“We need to achieve a 7% reduction in CO2 emissions year on year, and we need to challenge ourselves with new things to achieve that. It requires innovation, and the Public Works Contract doesn’t help. We need to find a way to allocate risk appropriately.”
He laments the continued existence of lump-sum single-stage contracting in Ireland. “That needs to change. It doesn’t deliver good outcomes. We have seen business failures as a result of the price agreed in contracts. Any company that has endured the pain of recovering a project from a failed contractor or supplier will tell you that the risk doesn’t go away when the contract is signed. We must get up to speed on risk sharing in Ireland and work together to minimise the impact when risk materialises.”
He brings a Bent Flyvbjerg approach to the subject. Bent Flyvberg is the Danish economist who has spent decades studying megaprojects. “We need to think slowly and act fast to achieve the best outcomes. The industry has embedded a working practice of thinking fast and getting onto site quickly. Then they repent at leisure. In a two-stage process, the client and the contractors and designers work together on deciding what the best outcome should be and, having taken time to do that, move on to delivery. We also need to shift from a fixation on the lowest tender prices. Very often, you find you pay the same, if not more than you do in a two-stage process. The two-stage process offers greater predictability of outcome and cost control.”
The collaborative effort isn’t limited to the main contractor. “Work with the supply chain is also important. They have skills to add to our capability; they are not just capacity adders. We are fortunate to have such a strong supply chain in Ireland.”
Closing the skills gap
Talent is another problematic area.
“The employment market is really hot in Ireland at the moment, and there isn’t a pool of people to take on,” he notes. “It takes four to five years to come in and become proficient. We invest in our people to grow our own talent. We are also seeking to find new routes for people to enter the industry. We are trying to find non-traditional routes. We can teach construction skills to people who have done any STEM subjects. Apprenticeships are really important as well. There is no one route into construction. There are many, many routes. There are so many different roles in a business like ours. Technical, administration, finance, everything a normal company needs. We are not a projects business, we are a business that does projects, and we need a wide range of skills.”
The skills shortages can also be mitigated by modern methods of construction, he believes. “Offsite construction has a role to play. We have our Modular Homes Ireland facility in Cavan, and the quality and productivity in a factory are always better than on site. It may not be cheaper, but it is always quicker. It reduces unknown costs and can be applied to any type of building, not just housing.”
It requires changes to the way projects get delivered. He explains that factories deliver products at a regular pace, and sites need to be organised to accept their output at that rate. “That turns a site into a much more predictable environment. It makes processes more repeatable and enables the use of scarce skills in a more valuable way.”
It doesn’t replace those skills completely, of course. “It is still a very strong people industry. The best of what we see is delivered by highly capable and skilled people who are really proud of what they do.”
Looking ahead, while inflation is moderating, it is still presenting problems for the industry.
“BAM is a global business,” he points out. “We are able to use our global supply chain reach to mitigate the impact of inflation. There have been availability issues, of course, but we have the scale to buy in quantities beneficial to suppliers and ourselves and get materials when others can’t.”
For the longer term, he believes the focus must remain on sustainability. “We must make real progress on that. We have seen during Covid-19 how a nationally coordinated response delivered positive outcomes. Climate change is such a crisis that it needs to be dealt with in the same way. We need to shift from a confrontational way of working to a collaborative model. We have a very important 50 years ahead of us, and we all need to play our role in delivering the solutions society requires,” Alasdair Henderson concludes.