Soaring cost of utility delays exposed

A newly released report has castigated the performance of utility firms in providing connections to construction sites. The survey of 200 contractors by the National Federation of Builders found that 85% experienced problems seeking new connections to gas, water and electricity networks. Over 40% reported financial loss as a result.

Electricity companies were singled out for particular criticism with supply problems being recorded in half of projects. Almost a third (31%) of these delays resulted in the contractor suffering a financial loss.

Other providers faired slightly better - 18% of projects had suffered financially as a result of gas delays, with 14% experiencing penalties through water supplies failing to be connected on time.

Stephen Morris, North West regional chairman at the NFB and head of the Federation’s utilities’ steering group, said: “The majority of respondents felt that standards of service in water, gas and electricity had either stayed the same or worsened compared to a year ago. With thousands of contractors and their clients being penalised through no fault of their own, it’s clear something radical needs to happen.

“The telecoms utilities outperform all others and whilst competition contributes to that, the NFB believes the powers of Ofcom are not replicated in the regulatory powers of Ofgem and Ofwat. Our priority therefore will be to work closely with the regulators, ensure competition in the future works more effectively, and that it’s communicated more clearly to the SME community.”

Survey highlights include:

Problems with utility companies were reported on 86% of construction sites

• 50% of sites suffered a delay because of poor performance by the electricity companies. In 31% of cases this had caused financial losses
• 28% of sites experienced delay due to the poor performance of the water network companies. In 14% of cases this had caused financial losses
• 5.8% of sites experienced delay due to the poor performance of the telecom network companies. In 2% of cases this had caused financial losses
• The majority of respondents felt that standards of service in water, gas and electricity had either stayed the same, or worsened compared to a year ago
• The majority of sites had not heard of Regulators’ plans to introduce connection competition
• Of those that had heard of competition, 36% had used it for electricity, 44.2% had used it for gas, and 21% had used it for water
• Of those that had used competition, only 18% said that it improved water connections service levels, 37% for gas and 31% for electricity

“The development and investment we make in new techniques to reduce build time is often counteracted by the delays caused by utilities.

“It’s not just connections where we have problems either - we’ve suffered significantly when trying to organise disconnections. In many cases this work is subcontracted to firms who turn up on site with the wrong machinery and no idea about what they’re supposed to do. It’s extremely common for utilities not to provide these contractors with pipeline maps.

“We’ve experienced this issue repeatedly so now we dig down to the relevant point before they arrive. This costs us thousands of pounds, but the alternative is a lot worse.

“In terms of connections, we experience delays in receiving quotes for work and when we do they’re meaningless. On one of our current sites we’ve been held up by 12 weeks directly through utility companies. The problem seems to be poor communication, no consistent point of contact and a desperate shortage of labour.”

David Woodward, contracts manager, Cruden

“Problems with utility companies are across the board. Whether it’s a £60m office development or a small domestic house, our business suffers consistently. We book appointments well in advance, gear up for them being on site on a certain day, only to find that the visit is cancelled at the last minute.

“There’s also a lack of commonality in terms of connections which is frustrating. Water, gas and electricity providers have different ways of working in different parts of the country and getting to grips with these processes can be a real headache. Utility companies need to resolve these issues as a matter of urgency.”

Contracts Manager, Sheffield-based contractor

“Utility firms consistently create delays on our sites. There seem to be too many businesses and contractors involved in the connection process and they all have an inability to communicate with each other.

“The nine week lead time for gas connections in our region makes life very difficult. The fact that these deadlines are then missed makes matters even worse. We have a significant number of properties that have been waiting weeks for their NHBC certificate inspection, but until the connection is made, nothing can be done.

“Utility firms before privatisation were inefficient, but at least they were effective. Now they’re neither. There are quite simply too many links in the chain and when one breaks, the whole thing falls down.”

Site Manager, North of England-based house builder