Balfour Beatty plc (/ˌbælfʊˈbiːtiː/) is an international infrastructure group based in the
United Kingdom with capabilities in construction services, support services and infrastructure investments. A constituent of the
FTSE 250 Index, Balfour Beatty works across the UK, US and Hong Kong.
By turnover, Balfour Beatty was ranked in 2021 as the biggest construction contractor in the United Kingdom.[4]
History
Early years
Balfour Beatty was formed in 1909, with a capital of £50,000. The two principals were
George Balfour, a qualified mechanical and electrical engineer, and Andrew Beatty, an accountant. The two had met while working for the
London branch of the New York engineers JG White & Company. Initially, the company concentrated on
tramways, the first contract being to construct the
Dunfermline and District Tramways that opened in November 1909 for Balfour Beatty's own subsidiary, the Fife Tramway Light and Power Company.[5]
Balfour Beatty's general construction expertise was extended during
First World War with, for example, the building of army camps.[6]
George Balfour was elected to the
House of Commons in 1918 and played a large part in the debates which established the
National Grid. To service this new market, George Balfour, Andrew Beatty and others formed Power Securities to finance projects, and the two companies, with their common directors, worked closely together. Balfour Beatty was heavily involved in the development of Scotland's hydro electric power, building dams, transmission lines and power stations.[6]
Other work between the wars included the standardisation of the electricity supply in
Derbyshire and
Nottinghamshire, and the construction of tunnels and escalators for the
London Underground. Extensive overseas work started in 1924 when Balfour Beatty took over the management of the East African Power & Lighting company; construction work included hydro electric schemes in the
Dolomites, Malaya and India, power stations in Argentina and Uruguay, and the
Kut Barrage on the
Tigris in Iraq.[6]
By the onset of the
Second World War, control of the firm had changed: Andrew Beatty had died in 1934 and George Balfour died in 1941. Construction work was now dominated by the war effort, and notable projects included blocking the approaches to
Scapa Flow and the building of six
Mulberry harbour units.[7]
Post World War II
Peacetime saw a resumption of Balfour Beatty's traditional work, with power stations and railway work dominating at home. Overseas, a construction company was bought in Canada in 1953, and other work included the
Mto Mtwara harbour in
Tanganyika (now
Tanzania) and the
Wadi Tharthar irrigation scheme in
Iraq.[6]
In 1969, Power Securities, which by then owned Balfour Beatty, was taken over by cable manufacturer
BICC.[8] Balfour Beatty moved away from its traditional area of expertise in 1986, when it formed Balfour Beatty Homes, building on a modest scale from its office in
Nottingham. It also opened offices in
Paisley and
Leatherhead, and in 1987, it bought the Derbyshire firm of David M Adams to give it an annualised production rate of up to 700 houses.[9]
Little more than a year before the housing market collapsed, through its parent BICC, Clarke Homes was bought.[10] By the middle of the 1990s, sales were down to only five hundred a year, and although no financial figures were ever published, the housing operation was believed to have suffered heavy losses. Balfour Beatty Homes was renamed Clarke Homes and then sold to
Westbury in 1995.[11]
21st century
In May 2000, BICC, having sold its cable operations, renamed itself Balfour Beatty.[12] It then commenced a series of acquisitions, primarily in the United Kingdom and North America; in 2004, it also acquired
Skanska's 50% stake in Hong Kong's
Gammon Construction.[13] In 2011, Balfour Beatty sold its trackwork manufacturing business to
Progress Rail.[14][15]
Acquisitions in the United Kingdom
Balfour Beatty's acquisitions in the United Kingdom included: construction services business Mansell plc, for £42m in November 2003,[16] construction and civils contractor Birse plc, for £32m in August 2006,[17]Bristol construction company Cowlin Construction, also in October 2007,[18] and regional contractor Dean & Dyball for £45 million in February 2008.[19]
In November 2010, the company bought the remnant of collapsed construction company
Rok plc for £7 million.[20]
North American acquisitions
In February 2007, Balfour Beatty acquired Texas based
Centex Construction for £180m.[21] In February 2008, the company bought GMH Military Housing, a United States-based military accommodation business, for £180m.[22]
In September 2009, the company agreed to buy
Parsons Brinckerhoff, a project management firm based in the United States, for $626 million.[23] Balfour Beatty sold Parsons Brinckerhoff to
WSP Global for $1.24bn in October 2014.[24] In October 2010, the company bought Halsall Group, a Canadian professional services firm, for £33 million.[25]
In June 2011, it bought
Howard S. Wright, one of the oldest contractors on the West Coast of the United States, for £58 million[26] as well as Fru-Con Construction, a water and wastewater contractor based in the United States, for £12 million[27] and in January 2013, it bought Subsurface Group, a consulting and engineering firm based in the United States.[28]
Rebuffed merger
In August 2014, the company rebuffed three offers by its rival in the United Kingdom,
Carillion, for the two companies to merge. The last bid, which valued Balfour Beatty at £2.1 billion, was unanimously rejected by the Balfour Beatty board on 20 August 2014, one day before a deadline for negotiations to conclude. Balfour refused to allow an extension of time for negotiations which could have prompted a fourth bid.[29] Carillion subsequently announced it would no longer pursue a merger with its rival.[30]
In May 2021, it was announced that
Lord Allen would be the next Balfour Beatty chairman, succeeding
Philip Aiken from 20 July 2021.[31]
In October 2005, Balfour Beatty was found guilty of breaching health and safety laws, and were fined £10 million for its involvement in the October 2000
Hatfield rail crash. The crash resulted in the death of four people, and injured more than 70.[32]
In March 2009, the company was found to be a subscriber to the
Consulting Association, a firm which was then prosecuted by the UK
Information Commissioner's Office for breaching the
Data Protection Act by holding a secret database of construction workers details, including union membership and political affiliations,[33][34] and six enforcement notices were issued against Balfour Beatty companies.[35]
In January 2010, individual workers had started suing the company for being on the
blacklist;[36] the first of these cases, however, was ruled in favour of the company.[37]
On 10 October 2013, Balfour Beatty was one of eight construction firms involved in blacklisting that apologised for their actions, and agreed to pay compensation to affected workers.[38] The eight businesses established the Construction Workers Compensation Scheme in July 2014,[38] though the scheme was condemned as a "PR stunt" by the GMB union,[38] and as "an act of bad faith" by Parliament's
Scottish Affairs Select Committee.[39]
A High Court case regarding the blacklisting was scheduled for May 2016.[40] In October 2015, during preliminary stages of the case, the eight firms did not accept the loss of earnings that the blacklisting victims had suffered,[41] but, in January 2016, they increased their compensation offers.[42]
On 22 January 2016, the High Court ordered 30 construction firms to disclose all emails and correspondence relating to blacklisting by 12 February 2016,[43] after it emerged that Balfour Beatty managers had referred to blacklisted workers as ‘sheep’.[44] However, some settlements were eventually agreed, and on 11 May 2016, a 'formal apology' from the 40 firms involved was read out in court and the case (Various Claimants v McAlpine & Ors) was closed.[45]
In December 2017,
Unite announced it had issued high court proceedings relating to blacklisting against twelve major contractors, including Balfour Beatty.[46]
Late payment
In April 2019, Balfour Beatty was suspended from the UK Government's
Prompt Payment Code, for failing to pay suppliers on time.[47] It was reinstated around 10 months later.[48]
Military housing fraud
In December 2021, Balfour Beatty Communities LLC, one of the largest providers of privatized military housing to the U.S. Armed Forces, pleaded guilty to one count of major fraud against the United States. The company was sentenced to pay over $33.6 million in criminal fines and over $31.8 million in restitution to the U.S. military, serve three years probation, and engage an independent compliance monitor for three years.[49] The company lied about repairs made to housing for U.S. servicemembers and pocketed performance bonuses to which it was not entitled.[50]
Operations
Balfour Beatty is an international infrastructure group. They finance, develop, build and maintain the vital infrastructure that we all depend on. Its capabilities include:[51]
Construction services: Civil engineering, building, ground engineering, M&E, refurbishment, fit-out and rail engineering
Support services: electricity networks, rail and highways
Infrastructure investments: A portfolio of long term (
public–private partnership, 'PPP') concessions in the United Kingdom, primarily in the education, health and roads/street lighting sectors, plus a portfolio of long term military and multi-family housing, and student accommodation assets in the United States. Balfour Beatty also has interests in non PPP assets in the United Kingdom.
Balfour Beatty is a member of a wide range of industry and trade bodies, associations and institutions, reflecting the significant breadth of its capability as well as corporate priorities. These include, for example, the
CECA, the
Nuclear Industry Association, the
Rail Industry Association and Women into Construction.[52]
^Hartcup, Guy (2011). Code Name Mulberry: The Planning Building and Operation of the Normandy Harbours. Pen & Sword Military. p. 94.
ISBN978-1848845589.
^"100 HDD Viking Link begins". Great Southern Press (Trenchless Australasia, Australasian Society for Trenchless Technology). 16 February 2021.
Archived from the original on 19 October 2022. Retrieved 17 February 2021.