By Pat Turnbull

In autumn 2021 Unite the Union blamed a recent spate of serious accidents on the HS2 tunnelling and track laying project in London on a shortage of safety reps. The latest accident reported on 30 September was when a worker suffered arm injuries after clay fell on them from height. It resulted in a safety shutdown on the project. This and other serious incidents were judged to be because of the excessive hours the majority of workers were undertaking on the site. [1]

The accidents had occurred on the section being built by a joint venture between the companies Costain, Skanska and Strabag. On other sections of the project Unite had been allowed to speak freely with workers during their breaks in the welfare facilities, essential to allow the union to discuss working conditions and recruit safety reps. Only Costain/Skanska/Strabag refused, saying they would provide a separate room, meaning workers who wanted to visit the union would have to walk past the offices of the site managers. This was interpreted as a form of intimidation, especially as Skanska and Costain are proven blacklisters, and while the vetting database, The Consulting Association, was closed down in 2009, there is no doubt that blacklisting continues. In August 2021, 200 construction workers from across the UK took part in a protest at Euston against the joint venture as workers were not receiving the correct overtime rates, were receiving too few holidays, and were not covered for death and serious injury. [2]

The HS2 project will be a high-speed rail link between London, Birmingham, Manchester and the East Midlands. Plans to also connect to Leeds have been scrapped. Phase 1 between London and Birmingham was due to open at the end of 2026; this is now expected between 2029 and 2033. Phase 2 has also been pushed back, from 2032-33 to 2035-40. The estimated cost as of 2021 was between £72 billion and £98 billion. The original budget was £55.7 billion. According to the BBC, rising costs are due to ‘management issues and unrealistic land valuations’. [3]

Problems of employment conditions in the construction industry go back many decades. Unite Construction Allied Trades and Technicians section says on its website: ‘At the heart of our industrial activity is the core policy that Unite wants to see all construction workers directly employed under the terms and conditions of the collective agreement relevant to their trade.’  This is vital to maximise workers’ unity in fighting, through their unions, for better pay and working conditions.

In 2020-21, 969,000 sole traders, 7,000 partnerships and 134,000 limited companies had deductions made from their pay via the Construction Industry Scheme which is unique to that industry. Workers are considered to be self-employed, but unlike any other form of self-employment the great majority are taxed at source, which leads the union to conclude that this is bogus self-employment. [2]

The three companies involved in this joint venture all have interesting histories.

SKANSKA

Skanska Cementgjuteriet was founded in Sweden in 1887 as a maker of concrete and its head office is still in Stockholm.  It changed its name to Skanska in 1984. Its website says: ‘We grew to construct churches, roadways and power plants…Today we design and build some of the largest, most complex structures on earth.’  Under ‘What we do’, it says: ‘Our operations are focused on three distinct streams: Construction, Commercial Development and Homes.’ [4]

In 1897 the first contract outside Sweden was for hollow concrete blocks for telephone cables in the UK; in 1956 Skanska built silos in Iraq; from 1960 to 2000 it built power plants, irrigation plants, infrastructure, schools and hospitals in several developing countries such as Bangladesh, Hong Kong, India, Malaysia, Pakistan, Sri Lanka, Saudi Arabia, Libya, Colombia, Panama and Peru; in 1971-78 it built its first projects in the US, subway systems in New York and Washington DC.  In 1993 commercial property development operations were launched in Poland and the Czech Republic. From 2007 to 2014 the UN headquarters in New York were renovated. In 2012 the Elizabeth River Tunnels project was Sanska’s first Public Private Partnership contract in the US.

Financially, in 1964 its sales exceeded SEK (Swedish krona) 1 billion for the first time.  In 1965 it registered on the A list of the Stockholm stock exchange. In 1989 it made its first company acquisition in the US, Slattery – this was followed by Karl Koch, Sordoni and others. Between 1994 and 2000, in international expansion, construction companies were acquired in Finland, the UK, Norway, Poland, the Czech Republic and Argentina and revenue increased to SEK 165 billion. By 2001 the number of employees was around 80,000. From 2000 to 2008 there was restructuring to increase profitability, with the focus on selected home markets. Operations in Africa, Asia and Russia were divested. In 2015 Skanska’s share price reached a record high of SEK 208.40.

COSTAIN

Costain was founded in 1865 in Liverpool by Richard Costain and his future brother-in-law who crossed from the Isle of Man trading as jobbing builders and undertakers. Its website says: ‘…it was the move south to build houses in the booming suburbia around 1920s London that really sparked the family firm’s expansion…’ [5] The website says, one major project was ‘Dolphin Square in London’s Pimlico. The largest block of flats in Europe at that time, the first 600 apartments were ready for use just a year after construction started in 1935. The second phase contained [a] novel centralised heating system, involving waste heat being piped from Battersea Power Station on the opposite bank of the Thames.’

In the 1930s Costain moved overseas for the first time, building an 11-mile section of the Trans-Iranian Railway through the Alborz Mountains. Although it made a substantial loss, the technical feat greatly enhanced its reputation. ‘Iran was also the site of Costain’s first foray into petrochemicals, with the building of the refinery at Abadan in 1938.’

After the Second World War Costain’s projects included thousands of semi-permanent concrete houses and the Festival of Britain site on the South Bank of the Thames. In the Middle East it built a 10 million gallon-per-day water distillation plant in Kuwait which was important to its modern development. Costain states: ‘Links with Kuwait continue to this day with the influential Kharafi construction family holding a major stake in the company. Airports in Bahrain and Dubai followed, as did the world’s largest dry dock and the Middle East’s largest deep-water port in Dubai.’

Costain broadened into open cast mining in Scotland (Westfield) and Australia, but a venture into ‘geologically troublesome deep mines in the US…was a major factor almost bringing down the company in the mid-1990s.’ However, Costain survived to build infrastructure and major buildings in Hong Kong, Nigeria, Zimbabwe, Botswana, Sydney and Tomsk. In the UK it was the lead constructor on the Thames Barrier, and helped build the Channel Tunnel, the Channel Tunnel Rail Link, and the revamp of St Pancras Station.  

Costain has about 3,100 employees across the UK, and the adjusted group revenue for year end 31 December 2020 was £1,070 million.

Costain and Skanska UK were two of seven big construction companies which in 2019 agreed to pay out £1.9 million in compensation to 53 blacklisted workers. The others were Balfour Beatty, Kier, Laing O’Rourke, Sir Robert McAlpine, and Vinci. There was an eighth member of the group, Carillion, but by then it had been liquidated. The settlement followed a previous £19.34 million award to 412 blacklisted victims. The companies acknowledged having conspired to run The Consulting Association as a vetting database which kept building workers who were active trade unionists out of a job. [6] 

STRABAG

Strabag is an Austrian construction company based in Spittal an der Drau, with its headquarters in Vienna. It has its origins in two businesses. One was Baumeister Lerchbaumer-Isola-KG which was founded in 1929 by Anton Lerchbaumer and his son-in-law, Franz Isola. It became known as Ilbau AG in 1972. The other was Strassenwalzenbetrieb founded in 1895, known as Strabag from 1930. The two businesses came under the common ownership of BIBAG Bauindustrie Beteiligungs Aktiengesellschaft in 1998. The company was subsequently renamed Strabag SE. On its website Strabag/Zueblin International says its international activities are executed by its subsidiaries Strabag International GmbH and Zueblin International GmbH. Their activities comprise transport infrastructures (roads, railways, airports, and test tracks for the automobile industry), building construction (turnkey construction, industrial facilities), and civil engineering (bridges, dams, hydraulic asphalt engineering, tunnelling, pipe jacking, microtunnelling, cooling towers and harbour facilities). [7]

Strabag was one of the main profiteers of the Nazi building projects during the Second World War and before. It was a main contractor of Organisation Todt and built concentration camps, the Westwall (known in Britain as the Siegfried Line) and Norway’s Blood Road. Organisation Todt (OT) was a semi-military engineering organisation in Nazi Germany from 1938 to 1945, notorious for using slave labour. At its peak, the organisation controlled a workforce counting 1.5 million people. Most of the Soviet prisoner of war workers were assigned to OT.  An online exhibition by the Norwegian Museum of Science and Technology mentions Strabag by name. It includes an excerpt from a letter of December 1943 from the local OT subdivision to the leaders of Strabag in Stavanger saying, ‘I wish to emphasise that abuse against prisoners of war is unacceptable and also beneath the dignity of a German and an OT worker.’ These hollow words are exposed by Max Erich Feuchtinger, responsible for the workforce in OT, writing in 1944: ‘The workers from the East are in a special position…They can and must be treated much harder than the culturally superior people of …Western Europe.’ [8] From 1943 to 1945 OT administered the construction of all concentration camps to supply slave labour to industry.

In the post war period, Strabag was involved in major projects in Iraq in 1988, Denmark 2002, New Zealand 2002, Bulgaria 2006, Montenegro 2007, Ireland 2010, Canada 2013 and Tanzania 2015. A video on its web site says that it completes more than 15,000 projects every year. It has been in Poland since the 1980s and is the market leader in Polish transport infrastructure. It also mentions the Hamburg dancing towers, and the Gotthard base tunnel, the world’s largest railway tunnel, where it is sole contractor for one third of it. [7]

Both Skanska and Strabag were involved in a public scandal in Slovakia, where in December 2013 the Supreme Court of the Slovak Republic confirmed that in 2004 one of the companies of the Strabag Group participated in a bid-rigging cartel of construction companies together with companies of the Skanska Group and Mota-Engil Group. The illegal conduct was associated with the tender for the execution of works for the construction of the D1 highway in Eastern Slovakia.

TRADE UNION ACCESS 

In its spring 2022 newsletter, Building Worker, Unite was able to report that national officer Jerry Swain had secured agreement for new guidance in the agreement between the unions and the Construction Industry Joint Council. It states that union officials will be given access to workers in welfare facilities including site canteens, and that they will be able to meet and speak to workers during rest and break periods, exactly what Unite had been requiring from the Costain/Skanska/Strabag joint venture on the HS2 project. [9]

 

1. Serious HS2 safety failings a result of union busting tactics, Unite the Union 30/9/21
2. Building Worker, Unite the Union Autumn 2021
3. HS2: what is the route, when will it be finished and what will it cost?, BBC 18/11/21
4. Welcome to Skanska | www.skanska.com
5. Home | Costain
6. Blacklisters agree a further £1.9m compensation, The Construction Index 14/5/19
7. STRABAG SE - STRABAG SE
8. Grossraum: Organisation Todt and Forced Labour in Norway 1940-45, The Norwegian Museum of Science and Technology
9. Building Worker, Spring 2022, Unite the Union

 

HS2 demolition site at Euston - Photo by Matt Brown