Socialist Worker

Britain's global profiteer

Issue No. 1707

Inside Balfour Beatty

Britain's global profiteer

MORE AND more people are revolted by the domination of the world by multinational corporations. Often the targets for people's anger are giant corporations based in the US, the world's biggest capitalist power. Yet a British-based multinational company, Balfour Beatty, is right up there among those plundering the world. BALFOUR BEATTY is one of the world's largest companies, with an annual turnover of �2.5 billion, as big as the total annual output of countries such as Zambia or Uganda.

It has an appalling record of profiteering around the world.

  • The company is one of the main contractors for the Ilisu dam in Turkey, a project slammed by human rights campaigners and by a committee of British MPs.
  • It has made huge amounts of money from privatisation schemes. According to the company, "We have achieved considerable success under the UK government's Private Finance Initiative in roads, power and healthcare." It is up to its neck in NHS privatisation schemes such as that at London's UCLH hospitals.
  • Balfour Beatty subsidiaries connive with governments around the world to profit from privatisations demanded by the International Monetary Fund and the World Bank.
  • The company was involved in the 1994 collapse of London's Heathrow airport tunnel extension, which a judge called "one of the worst civil engineering disasters in the United Kingdom in the last quarter of a century".

Balfour Beatty has relied heavily on successive British governments to underwrite its operations.

Under the Tories it picked up over a fifth of the �1.4 billion industrial overseas aid programme between 1978 and 1994. At the same time it made hefty donations to the Tory party. During the Tory years Balfour Beatty's then parent company, BICC, also gave �90,000 to anti-union bosses' organisations such as Aims of Industry and the Economic League.

Balfour Beatty is now the darling of New Labour. Government minister Nick Raynsford has spent months cobbling together a consortium, which includes Balfour Beatty, to win rebuilding contracts in Turkey following last year's earthquake.

And Tony Blair personally intervened last December to approve the �220 million subsidy to the company to build the Ilisu dam.


THESE ARE some of the men behind the profit-chasing that drives Balfour Beatty.

  • LORD WEIR is the company chairman, as well as being a director of the Canadian Pacific and St James' Place Capital companies. He is also a former director of the huge Weir Group engineering company and of both the Bank of England and British Steel. He got �150,000 in "fees" from Balfour Beatty last year.
  • MIKE WELTON is the company's chief executive. He got �355,026 last year and has over �150,000 in share options.
  • IAN TYLER is the finance director, after moving over from multinational Hanson, famous for setting up corporate takeovers and mergers. Tyler pocketed �101,846 last year and has over �80,000 in share options.

The PFI pie

THE PRIVATE Finance Initiative allows private companies to take over schools and hospitals, and to make profit out of building and running them. Balfour Beatty is part of the PFI schemes at Edinburgh, North Durham, UCLH and other hospitals. The schemes mean:

  • Some 17 percent less spending on clinical staff in Edinburgh Royal Infirmary and 22 percent less at North Durham.
  • About 125 fewer beds at London's UCLH hospitals.
  • Attacks on the pay and conditions of health workers.

Balfour Beatty also has a large number of contracts with Railtrack to maintain rail infrastructure.

A spokesperson for the RMT rail union told Socialist Worker, "Balfour Beatty is the company we have the most trouble with."


Corporate mindset

BALFOUR BEATTY was the principal contractor on the �550 million Heathrow tunnel extension which collapsed in October 1994. In February 1999 the Health and Safety Executive hit Balfour Beatty with a then record fine of �1.2 million. An inquiry into the string of collapses on the Heathrow tunnel reported this month. It concluded: "The collapses could have been prevented but for a cultural mind-set which focused attention on the apparent economies and the need for production rather than the particular risks."

Balfour Beatty was also one of five contractors on the Channel Tunnel. All five were found guilty of failing to ensure the safety of seven workers who were killed on the site.

A judge commenting on the death of one 26 year old worker said, "The accident happened because the safety procedures in place were not properly supervised and carried out." Last week a young worker was killed on a Balfour Beatty construction site (see page 14).

Yet Balfour Beatty remains a frontrunner to take over part of the tube system under John Prescott's privatisation plan.


Aid for whose benefit?

BALFOUR BEATTY was one of the two British firms to win the contract to build the Pergau dam in Malaysia in 1991. Margaret Thatcher's government agreed to fund the project with �234 million of overseas aid.

Her son was employed as an adviser to the other British contractor, Cementation International. Thatcher's foreign affairs adviser, Sir Charles Powell, became a director of Trafalgar House, which owns Cementation International. The subsidy to build the dam was secretly linked to an agreement by the Malaysian government to buy �1,000 million of British made arms.

The High Court later ruled that the Tory government had illegally used overseas aid to subsidise arms sales.


Ilisu dam scandal

A PARLIAMENTARY committee last week confirmed everything campaigners against the Ilisu dam in Turkey have been arguing.

The International Development Select Committee found that:

  • Up to 25,000 Kurdish people will be forced from their homes.
  • The Turkish state, which refuses to recognise the rights of the country's Kurdish minority, has not consulted them about the project.
  • Flood waters will inundate the ancient city of Hasankeyf, which contains archaeological treasures.
  • The dam will halve the flow of water downstream to Syria and Iraq, risking major military tensions.

The Ilisu dam is so damaging to people, the environment and the prospects for peace that even the World Bank has refused to back it. Yet the New Labour government brushed aside the MPs' committee and chose instead to stand by Balfour Beatty.

  • Contact the Stop the Ilisu Dam Campaign on 01865 200 550.

Company in the dock

FBI agents raided Balfour Beatty's office in the US state of Massachusetts last month. They seized computers and documents as part of a fraud investigation. Balfour Beatty is part of a consortium modernising the North East Rail Corridor in the US. The allegations centre on Balfour Beatty increasing its claim for the value of its work.

At the same time Balfour Beatty is in the dock in the southern African country of Lesotho, charged with bribery. The prosecution says the consortium which built the Katse dam, and in which Balfour Beatty had a 16 percent stake, bribed a government official. Balfour Beatty's parent company, BICC, is banned from bidding for public contracts in Singapore.


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Sat 29 Jul 2000, 00:00 BST
Issue No. 1707
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