Construction companies should be more honest about the likely timescale and cost of a project when they bid for it, according to a top government official.
Saurabh Bhandari, director for property delivery and transformation at the Office of Government Property, said “quite often” when his organisation looks at bids “they are unbelievable”, which “creates a lot of uncertainty [and] a lack of confidence in what the industry is doing”.
Speaking at the Construction Week conference in Birmingham, he said: “My ask of the industry would be, we need to be more real… whether you’re a consultant, whether you’re a contractor, whether you’re an appraiser, we need to get a lot more real about what is really possible.
“I know sometimes the procurement strategies haven’t allowed you to always say it out loud – to say what really needs to happen here – but that ultimately drives a lower confidence business case that takes years off a project.”
Bhandari added that dubious bids also lead to projects “which never come to fruition, simply because the basis upon which some of these cases are made are flakey at best”.
The Office of Government Property is part of the Cabinet Office and looks after all of the non-infrastructure parts of the government’s estate, comprising 160 million square metres.
Elsewhere in his discussion with Emily King, director of LDNY Consulting, Bhandari suggested the government will increasingly integrate different types of development, as well as potentially look for commercial opportunities within new buildings, to reduce costs.
“If you just look at the government estate right now, we have a lot of facilities that we build individually. So you might be building a school at the same time you’re building a community centre.
“The NHS is looking at delivering a lot more neighbourhood healthcare… but currently the industry, as well as the client, is thinking about those things as separate entities, rather than consolidated entities.
“We really need to start thinking about these things differently[…] till the time we actually create [more] value, we will not be able to close the funding gap, and much of what we are really going to have to do is to consolidate our assets.”
Bhandari said the government’s development pipeline “requires over £1.5tr pounds of funding”. But the infrastructure plan published by the government in February revealed it expects to spend £775bn over the next decade across the public and private sectors.
“That doesn’t mean we stop doing stuff. That means we need to find more innovative ways of actually generating that cash, but more importantly, investment that people are actually able to put money into.”
