Contaminated Land - State of the market
Research released late last year by the College of Estate Management in Reading suggested that UK developers are, at long last, coming to terms with contaminated land and the wider issues of brownfield development.Faced with Government policy which places such strong emphasis on reusing brownfield sites as part of housing and sustainable development policy (the government has a target of building 60% of all new housing on brownfield sites, a target which it has met with ease), commercial and residential developers have been forced to take contamination and remediation issues into account if they are to realise their own business ambitions.
They have also realised that, in addition to the 'push' of Government policy, recent years have seen a number of 'pull' factors come into play, so that contaminated and brownfield sites can be seen as an opportunity as much as a liability.
Indeed, according to the C.E.M research, the vast majority of developers (94%) were prepared to undertake development on sites requiring remediation and over 70% had done so over the past 12 months prior to the survey.
Clearly, they feel that there is money to be made and with an estimated 100,000 sites in the UK sitting in approximately 200,000 hectares of contaminated land, they look likely to be right.
So, if the developers are being encouraged to build on the land, who is actually cleaning it up? And do they see it in the same light as this survey suggests?
Simon Pringle, director of consultancy firm, WSP Environmental, one of the UK's leading technology led remediation contractors and recently named by Brownfield Briefing as the UK's largest bio-remediation contractor, said he wasn't sure if this was a definite growth market.
"It continues to be strong, but whether it is actually growing as such is difficult to tell. There is definitely a trend towards the use of recognised expertise in the market which is resulting in certain firms, such as WSP, seeing an increase in instructions and a general market consolidation going on," he said.
"Our market share is increasing but this could well be reflected as a down turn in the market for certain other [smaller] businesses."
WSP's remediation arm has certainly grown fast, from a "standing start" in 1999, to a £10 million business with over 50 staff in 2005. This is in addition to WSP's other business divisions which comprise 350 staff in the UK and a £50 million global turnover.
Environ's Emma Hayward also believed that growth was still evident in the contaminated land sector, with risk assessment and remediation as definite areas of growth for Environ on a national scale.
Nigel Clarke, marketing director for Enviros said contaminated land was "definitely" a growth area, but perhaps not in the way people had expected.
"The growth is partly driven by legislation and partly driven by the clients recognising the opportunities. It's become a completely different ball game, from someone thinking, 'we've got a contamination problem, what can we do about it', to saying 'we've got a real opportunity to drive the value of this site up.'"
"More people are realising they're sitting on an asset whereas five years ago they'd think they were sitting on a liability," he said.
Entec's director of contaminated land, Walter Robertson, agreed: "Developers seem more prepared to take land on speculatively at a much earlier stage, before planning permission or any remediation work. If they gambled right, they can see a large increase in value."
So, why the change?
"I suppose people are wiser. They've done it a few times so they've more confidence that the risks are not so great," he said. "If you gamble a few times and get your fingers burned, you don't want to try it again, but if you do it ten times and get burned once, you know it's worth it for those other nine times."
WSP's Simon Pringle agreed that experience was certainly a factor in the growth and change of the market, but that a number of drivers were at work listing the regulatory situation, planning regime, demand for land to fuel the housing boom, increasingly educated clients, flight of capital into property from liquid assets, rise in PFI style investment structures, public regeneration funding, key projects such as the Olympics, and Objective One funding as all having an impact.
"Also, most projects now need to assess risks from contaminated land and from a waste management perspective," he added.
One other major factor impacting on the sector is the effect of the EU Landfill Directive. According to the CEM research, over two-fifths of housebuilders were likely to be discouraged from undertaking development on sites with contamination following implementation of the directive.
It is causing concern mainly because 'dig and dump' is still the most frequently used method of dealing with contaminated soils and, under the terms of the directive, would be discouraged.
Given these pressures, it is perhaps unsurprising that developing new technologies is a key concern for most of the contaminated land players.
"The introduction of the landfill directive and hazardous waste regs has introduced a commercial imperative to undertake on-site remediation technologies to be applied more widely," said Pringle. "This is leading to an increase in on-site bioremediation, thermal desorption and soil washing."
Certainly, companies like Deep Green UK, Churngold and Bio-genie are capitalising on this offering forms of thermal desorption, off-site 'soil surgeries', and in-situ bioremediation services respectively.
And, many of the consultancies are realising they will have to offer similar services themselves if they are to stay ahead of the game. Golder Associates (UK) is already promoting alternative innovative remedial techniques - often imported from other Golder Associate operations around the globe - as part of its growth strategy.
Environ's Emma Hayward said that, although dig and dump, (or 'excavate and dispose', as she so neatly put it), was still the most common form of remediation, in-situ forms such as chemical oxidation and reactive barriers were rapidly increasing in usage, as were ex-situ treatments such as thermal desorption.
Nigel Clarke of Enviros said that new technology and remediation techniques were essential for growth, but that no single technology had come out on top yet, and that there was no definitive "best" way to clean up a site.
"Most places are still considering their options site-by-site, so it's still a very muddy picture," he said. "We've still got a long way to go before the strategies around this are clear."
In addition, remediators are increasingly finding that, to capitalise on the variety of market activity, they were having to offer a "complete service" from start to finish, not just one aspect of the process.
"We try to work through the spectrum because we feel that's what clients are looking for," said Clarke, "more 'end-to-end' solutions, from site investigation and strategy, right through to remediation, design and passing it on to the developers."
"In the past, people have tended to work in different arenas but haven't provided a complete end-to-end service, but as brownfield development has become more of a strategic issue for the government it has created more opportunities," he added.
Golder Associates have developed a one-stop-shop for clients in addition to new remedial solutions, and have also put more emphasis on human health quantitative risk assessment, and more modelling to assess whether contaminants are actually polluting or causing harm.
Walter Robertson of Entec, believes that, as competition increases, firms will have to demonstrate more than just a one-stop-shop approach.
"Procurement is changing and becoming less personal - governmental departments and multinationals believe they can save money by bringing it all together under one roof - it's about trying to get more for less, but I don't believe you always get best value by just going for the cheapest bet," he said.
"You have to be able to demonstrate capability in contaminated land, waste, water management, planning, and health and safety. Those who don't could soon find their source of income has dried up over night."
If this is the case, it could spell the end for the small-scale contractors offering just one style of remediation for soils, and could explain why a company as large as WSP was reluctant to say specifically whether the market for contaminated land was growing, or whether smaller firms were just being squeezed out and eaten up by the larger operators.
It would seem that, even for a market based around something as seemingly stable as the land we live on, can change dramatically in a relatively short time. In this market, it forces them to either clean up their act, or get dumped.
By Edie news team.