BAA slashes staff at projects division

BAA is about to make sweeping changes to its construction projects division following a cost-cutting review.

The airport operator, owned by Spanish contractor Ferrovial, will axe 200 staff in project management and planning in a move that signals a departure from the construction management method used by BAA on its flagship Heathrow Terminal 5 project. It comes just two months before the £4.3Bn scheme is due to open.

Building led with the news, reporting that BAA let contractors know about its plans in the run up to Christmas, adding that most future contracts are expected to be let on a design-and-build basis.

Building quoted a contracting source as saying: "BAA wants to step back from more straightforward processes and allow contractors to take on more responsibility."

Just last week Ferrovial tried to play down fears that the credit cruch had scuppered its plan to refinance a £10Bn loan associated with the £10Bn purchase of BAA.