Whos up for the Olympics?

In recent years there has been some eye-watering examples of prestige projects taking the guts of some great companies, as well as leaving questions over the ability of the industry to deliver.

It is going to be a brave chief executive or chairman who takes his firm into a contract where, as sure as night follows day, phone calls will come from the prime minister’s office telling him or her that they could not care tuppence for their other clients, the Olympics comes first.

British firms will be at a disadvantage compared to their foreign competitors. Whatever the contract provisions are, there will be the additional pressure of national pride and obligation to one’s country, which the foreign firms will not have.

The foreigners will know that if there are problems then it’s the government, the Olympic Committee, everyone else who will have to resolve it. A phone call from the prime minister’s office might not have the same effect as it would to a British firm. I suspect that the call would probably be coded to say “how much do you want?”, “OK you got it”.

The notion that there can be a level playing field is only that, a notion. In the cold light of what is ahead, the initial industry euphoria about winning the Olympics has been replaced by a much more restrained view.

The challenge to our construction businesses will be the managing of the risks. By that I don’t mean the exercise in passing risk downward to a sub-sub contractor who has the least capacity to do anything about it whatever the contract might say. What I mean in this context is how the Olympics work can be ring-fenced such that its impact on the rest of the business is negligible.

The industry has many loyal clients who will not deserve to have their work put on hold for a couple of years or so. Any firm that does take itself out of the marketplace might find it difficult to get back into it. Some canny firms are hoping that that will be the route to their business development.