Best of both worlds

“WE ARE now a fully-fledged part of AECOM,” says Nigel Jenkins, business development director at AECOM Design Build. What he is talking about is the integration and rebranding of Earth Tech Engineering following its acquisition in July 2008 by US-based AECOM.

Earth Tech Engineering is now AECOM Design Build. It was snapped up by AECOM because the group saw it as a “good fit”, and fulfilled a core strategy of increasing its geographical reach and capability.

Jenkins says Earth Tech’s 6,000 consultant engineers around the world – the majority are in North America – was a major attraction for AECOM wanting the business, as was its water, environmental and transportation activities.

AECOM was also keen to obtain Earth Tech’s process contracting expertise – it wanted to expand its offering and include design and build predominantly in the water sector. The group’s longer-term aspiration is to establish itself as a main player competing with the likes of Bechtel and CH2M Hill, providing the full range of consultancy and construction services.

Jenkins says: “That’s the ambition, and it’s going ahead at full speed. They’re [AECOM] investing in us, and are very positive and supportive about growth in the long term. From Earth Tech’s perspective, what was pleasing was the desire to acquire us for our process design and build capability.”

Essentially, Earth Tech has become part of a group operating in specific “business lines”, including water, and which are spread across several countries worldwide. AECOM is a technical and management support services provider to a lot of markets including water, transportation facilities, environment and energy. It employs around 43,000 people spread across 100 countries, and turned over £5B in its 2008 financial year. “It’s a significant corporation,” says Jenkins.

AECOM’s philosophy is “enhancing the world’s built, natural and social environments”. Jenkins says this may come across “as a little aspirational” but he emphasises that all staff at the group are geared around achieving that aim.

AECOM Design Build is a process-led design and build contractor specialising in designing processes for water treatment and solid waste treatment. “We are not a technology manufacturing company. But we do a lot of R&D work with the universities to help give us a leading edge to secure process-led design and build work,” explains Jenkins.

He continues: “Being able to commit to a design and scope; delivering that on time and within budget; and to the quality expectation has become a real USP [unique selling point] for us with some of our key water clients in the UK.”

The company works with municipal and industrial companies in the water sector and also has a “track record” in the solid waste market in the UK.

In the past the company has been active in PPP and PFI projects. As Earth Tech, it was in a joint venture – Dalriada – with Kelda that won Project Alpha, which involved building four clean water treatment works for Northern Ireland Water.

Another joint venture project was with Tianjin Jie Yaun in China, and the company was to have operated the water treatment site for 20 years.

AECOM’s group strategy is not to get into long-term operations “we won’t be doing that in the future”, says Jenkins.

The organisation will, says Jenkins, be actively supporting PFIs (private finance initiatives), although the UK water industry is not seeing much of these at present. The same cannot be said for the waste sector.

He stresses that AECOM Design Build is not just focused on water. Solid waste treatment is also a core activity, and one that Jenkins envisages developing worldwide – he highlights North America and the Middle East as being major growth areas, in particular.

Jenkins adds: “This is a core market for us. We’re in the throes of pursuing some very major projects for waste treatment. You’re talking in excess of £100M Capex projects to treat municipal solid waste.”

Then on the water side there is the imminent AMP5 cycle, and AECOM Design Build has developed a clear strategy focusing on a number of AMP5 opportunities. The company has assessed and identified the capabilities it can offer to customers. As a result, the company has decided to focus on a small number of AMP5 programmes.

Jenkins explains: “You need to be very focused, which customers appreciate because you’re demonstrating a clear understanding of their business and their issues.”

Another reason for being selective over which contracts to tender for is the cost incurred of putting a bid together. Bids can cost “many tens of thousands of pounds”, says Jenkins. “They soon add up.”

He says that from a water company’s point of view “I can understand they’re looking to appoint organisations that will help and develop their infrastructure to meet exacting standards. They are going to rigorously examine their suppliers to see whether they can support their strategies over the next five to ten years because we’re moving into Water Framework Directive Territory now.

“I’ve seen change in the approach by some of the water companies to issues like carbon footprint and sustainability. They’re getting down into the thick of it now and testing our understanding and capability to support them. And I think it’s great because it plays to our strengths as AECOM and as AECOM Design Build.

“I understand why they’re going through thorough assessments, and it makes sense. We have to focus on where we see alignments of culture and capabilities, and that’s precisely what we’re doing.”

The company is in “mid to late procurement with two major water utilities”.

Jenkins says is also tendering for AMP5 work with “a third major”. Outside of the AMP programme, AECOM Design Build is also tendering for “a couple of multimillion-pound projects”. If some of this comes to fruition, AECOM Design Build will have a small number of AMP5 frameworks.

“We think this is about right for a company of our size and capability,” says Jenkins. “We can be really focused, and dedicate the right resources.”

He says a major benefit of being part of the AECOM organisation is that the company can call on the expertise of other parts and regions of the group to help in the water sector, and provide an element of fresh thinking.

“We’re getting a lot of support for what we’re doing in water and in the municipal solid waste sector. We are in the throes of bidding for AMP5 and various one-off projects in the water sector as well as projects in the solid waste sector.

“It’s a key time for our development.”