T5: when the engines stop, the whining continues

Though it landed on time and on budget, Heathrow Terminal 5's first few days could not be regarded as a runway success. Richard Brass reports

The shambolic opening of Heathrow Airport's new Terminal 5 at the end of last month ensured its appearance on the international transport map for reasons other than those intended by the builders, but even long before it was due to open, the terminal had already come to dominate the West London skyline, and its construction equally affected discussions of the UK's ability to pull off big infrastructure projects.

Leaving aside for a moment the humiliating failures on the opening day, the scale of the job alone makes it worthy of the attention. The site of the terminal covers 260 hectares, roughly the same size as Hyde Park. The roof, a vast piece of engineering whose erection was trialled over and over again in a field in Yorkshire to make sure it went smoothly on the day - a useful trick that should have been picked up in one or two other areas - measures nearly 400 metres long by 176 metres wide.

More than a million cubic metres of concrete, 150,000 tonnes of steel reinforcement, 90,000 tonnes of structural steel, 30,000 square metres of glass and 2,300 kilometres of cabling have gone into the project. The earth moved to create the building could have filled Wembley Stadium and then half-filled it again. It is expected to be used by as many as 35 million people every year. There are 11 miles of baggage conveyor belt - although the first passengers could be forgiven for thinking there were none.

The numbers are impressive. But, beneath all that concrete, steel and glass, there are questions about the real impact the new terminal will have, both on the chronic congestion that has made Heathrow one of the world's least favourite airports and on the troubled commercial health of British Airways. The failure of the terminal in its opening week may have begun to answer those questions.

The opening fiasco aside, however, there can be little doubt that on the construction side Terminal 5 is a remarkable achievement that has gone a long way towards rescuing the reputation of the UK construction industry. Any number of big infrastructural projects of recent times, including the Channel Tunnel, the Millennium Dome, the Jubilee Line extension, the British Library, the Scottish Parliament and the upgrading of the West Coast Mainline, have been beset by long delays and huge cost overruns, and from the outset there was a very real risk that Terminal 5 would go the same way.

But a radical approach to one of the issues at the heart of construction saw Terminal 5 rise out of the Heathrow mud with none of the traumas that had affected those earlier projects.

'Terminal 5 will be on time, it will be on budget, the quality will be as specified and the safety record will be the best in the UK construction industry,' said Mathew Riley, supply chain director at Heathrow's owner BAA. 'It shows that the UK construction supply chain can deliver when given the right environment to do so.'

Risk

The key to providing this environment at Terminal 5 has been a radically new approach to risk management. Conventional contracts in the construction industry pass on the financial consequences of risk from the client to the many contractors working on the project, a situation that usually results in huge legal claims and counterclaims, with delays and budget overruns all part of the experience.

On Terminal 5, however, BAA chose to take on all the risk itself. In exchange for open access to the books of the contractors and their willingness to work as part of an integrated team, BAA took responsibility for the risk, removing the chance of a debilitating wave of legal actions and delays.

This unconventional approach was laid out in the Terminal 5 Agreement, signed by all contractors on the project. 'What we realised was that, to expose that waste and manage the performance more efficiently, we would have to actively hold all that risk,' says Riley. 'We realised that you cannot transfer corporate risks around that are so intrinsic to the success of your company.

'In most contracts, or certainly construction contracts, 99% of the covenants are around the consequences of failure and who pays. The T5 Agreement was as much about actively promoting success as about worrying about failure. It took technical competence largely for granted, and focused as much on the behavioural competence of both companies and people.

'We wanted all the best brains focused on good technical solutions, trying to actively look at managing the cause of potential risks, rather than all the best brains focused on protecting commercial positions and managing the consequences of failure after the event. That's quite a shift in mindset and approach.'

The T5 Agreement has been widely praised among industry observers as an innovative approach to managing large projects, and has been held up by some as pointing the way forward for the construction industry. Others, however, believe the successful completion of the terminal was driven by more site-specific factors.

'In terms of project management and management of contractors, T5 is a relatively shiny example,' says Peter Morris, chief economist of the aviation consultancy Ascend. 'But one of the interesting issues is what the level of specification needed was. You had an airport that, to some extent, could always get its money back by raising charges, so you didn't really have to worry unduly about designing it down to a particular level.

'So the incentive to downscale it and cut costs, and make it a lean and mean terminal, probably wasn't there either. There was a low-cost airlines terminal built in Singapore, admittedly for different needs and in a different climate, but where if you compare it in terms of the additional capacity put in and T5, you get a factor of about 20-to-one in terms of the construction costs.'

Whatever the merits of the construction process, perhaps the key question in determining whether Terminal 5 can be regarded as a success is whether it helps to reduce the chronic congestion that has made Heathrow a byword for delays, queues and general aviation dysfunction, and which last year saw the airport voted as one of the two of the world's least favourite, along with Chicago O'Hare. On this crucial point, there could have been no worse indicator than the disastrous opening.

The sight on the opening day of piles of unclaimed luggage and ranks of irate passengers vowing never to use the airport again rammed home to even the most optimistic observers that the problems at Heathrow and at British Airways are far too deep for even a million cubic metres of concrete to cover up.

The embarrassment of the opening days exposed a whole range of unresolved issues within BA that need to be dealt with urgently if the reputation of the airport is to be salvaged and the future of the airline secured. The inability of key employees to reach their workplace on time, the collapse of state-of-the-art IT systems, the alleged inadequacy of the training given to check-in staff and the clumsy approach to aggrieved customers all point to very serious problems, topped off by the sight of BA corporate staff closing doors in the faces of TV crews to protect scarpering executives, not a trick that features in many media training handbooks.

The whole episode demonstrated that, no matter how impressive the construction and how innovative the project management, once the terminal had been delivered on time and on budget, it was all about the client, and the client is in trouble.

And beyond this, there is an equally serious question about what difference the new terminal will make, even when it is working. The beginning late last year of public consultation on proposals for a third runway at Heathrow highlighted the fact that not even BA nor BAA themselves think the new terminal will have much impact on overall congestion into and out of the airport.

Putting up a new building for passengers and parked planes may ease congestion once passengers are at the airport, but it will not make any difference to the problem of too many planes competing for too few landing slots. While that problem remains, the delays, queues and congestion are unlikely to get any better, no matter how state-of-the-art and swanky the passenger facilities.

'The problem of traffic is fundamentally driven by runway capacity,' says Peter Morris. 'And the runway capacity is full. Terminal 5 will rearrange the passengers a bit better, and they might have a more light and airy place in which to wait, but wait they will.'

And that means that, however pretty the new terminal, however groundbreaking its approach to risk management or environmentally friendly its systems, it is unlikely to make a substantial difference to the fortunes of the company that will use it. And BA, facing soaring fuel prices, a looming economic downturn, the costs of moving to Terminal 5 and shrinking margins, could do with a change in fortunes. Judging from its appalling handling of the opening of the terminal, BA's bright shiny new shed runs the risk of becoming as much a symbol of infrastructural inadequacy as those long queues on the M25.

Richard Brass is a freelance columnist and feature writer.