CLM rake in the Olympic profits – more from Building Magazine

More from Building magazine on the ODA's Olympic "Delivery Partner", who managed the construction programme for the event. They've looked at the profits made by the CLM consortium who fulfilled that vital role. (You can get access to much of the "Building" web-site free on registration).

"CLM, the private sector delivery partner for the London 2012 Olympics, achieved a 33% margin over the past six years on a turnover of £495m, Building’s analysis of the firm’s accounts reveals.

Accounts filed at Companies House reveal CLM - a joint venture between Laing O’Rourke, CH2M Hill and Mace - made a pre-tax profit of £162m between 2006 and the end of 2011 on a turnover of £495m - a margin of 33%".

Their article was also picked up by the Sunday Times last weekend - behind the firewall here.

I've still got mixed feelings on this one. On the positive side, CLM;

  • won the contract for this work fair and square through a competitive bidding process; and
  • did an excellent job, helping to deliver the Olympic programme to time and budget.

On the other hand, CLM:

  • have charged fees that appear out of line with industry norms. 33% is clearly an incredibly high margin by any standards;
  • and we don't appear to have had any appreciable knowledge transfer to the public sector left as a legacy

I don't see this as any sort of a scandal - but, as we keep saying, we need to understand how much this particular initiative cost the public purse if we're going to use the "delivery partner" model in other parts of the public sector.

First Voice

  1. Final Furlong:

    It’s a fair point that they won a competition but you may wish to interrogate the competition itself to determine whether or not they successfully negotiated a equitable deal with CLM. And, again, as I’ve mentioned on numerous occasions, when you have the biggest project budget in Government, you’re only area of focus is ‘time’. ‘Quality’ of course would be the other major consideration, but, as we all know, this was secondary. The Velodrome is a wonderful building but that’s largely because the legacy organisation (Lea Valley) made sure that it would be fit for purpose for the many years after the Games. Not so the Stadium, which looks, feels and operates like a ‘tin can’. All of the quality was value-engineered out either to make greater margins, reduce cost (to pass those costs on to a future tenant who, as we’ve seen, seeks loans from the Treasury to pay for it) or meet the delivery deadline to make Lord Coe look great in the eyes of the IOC. Personally, I remain stunned that the procurement and resulting ‘commercial model’ continue to be widely applauded.

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