The man and the Parliament millions

WHEN the contracts for the Scottish Parliament project were recently revealed there was one clear winner when it came to the league table of just who was making money out of the spiralling costs of the Holyrood fiasco: the O’Rourke Group.

The Essex-based company holds six contracts for the building and cladding of Enric Miralles’s Holyrood design. Back in 1998, according to figures released by the Scottish Parliament’s Corporate Body, these contracts were worth 35.7 million. The latest estimates predict the company will now be paid 54.5m. Even allowing for inflation of 4.5m, this is a huge increase, bringing the value of O’Rourke’s contracts alone to more than the original estimated cost of the entire project - which, you might recall, was just 40m.

In particular the value of two of the contracts has more than doubled: the construction of the assembly building frame was to cost 14.6m, and is now estimated at 34.3m, while the concrete cladding which was to cost 0.6m will now cost almost 1.3m. But then the O’Rourke Group is used to working on financially controversial government-funded projects. For the company also landed the contracts to help build the ill-fated Millennium Dome - which cost 789m over its lifetime, much of which was Lottery cash - and Portcullis House, a bronze-clad luxury office block for MPs, which ended up 41m over budget, although it’s understood O’Rourke’s work came in on schedule and on budget in both cases.

So who runs the O’Rourke Group? Those working in the construction industry know only too well, as Ray O’Rourke is nothing less than legendary. In 1978, the humble site engineer decided to start his own concrete business. Within a few years the Irishman had become such a successful specialist subcontractor he was dubbed the "King of the Subbies".

His company went on to land contracts to help build the Eurostar terminal at Waterloo in London, and the Bluewater shopping centre in Kent.

But those multi-million pound projects were small beer compared to the sums this construction group has amassed in recent years. O’Rourke really hit the big time two years ago with the audacious takeover of the construction arm of industry giants Laing.

The last firm standing when other interested bidders faded away, it was able to purchase one of the best known names in the trade - with assets valued at 27m - for the princely sum of 1. For a "subbie" to take over such a prestigious name was virtually unprecedented - the industry press called it "the troops taking over the generals".

The breakthrough catapulted O’Rourke, 56, into the major league. This year the Sunday Times listed him at 163rd in its Rich List, with a fortune of 195m.

One might assume O’Rourke would want to shout about such successes, but far from it. The O’Rourke Group, which he started off with his brother Des, is still privately owned, and very much a family business, although he owns 55 per cent. He jealously guards his privacy, rarely speaking to the press or allowing himself to be photographed.

Unlike most top businessmen, he pays a PR firm not to gain publicity but to field calls from journalists and refuse all requests for interview - and that includes requests for comment on the Scottish Parliament. But official figures confirm the O’Rourke Group is the single biggest beneficiary of contracts for the parliament building at Holyrood.

According to a parliament spokesman though, the cost of the building frame was affected by the need for increased space, the post-devolution redesign of the chamber, structural strengthening for bomb-proofing, and overall project delays.

"All the cladding and glazing contracts at Holyrood have been affected both by blast-related issues and the overall delays to the project," he adds.

The contracts O’Rourke won were awarded through Bovis Lend Lease, and not the parliament directly, which is the argument the Labour Party gave last year when it emerged O’Rourke had donated at least 5000 to its coffers. Labour has refused to confirm how much had been donated, but insisted it "had nothing to do with" the Scottish Parliament contract.

Nevertheless, the revelation sparked concerns about Labour’s links to big business, particularly as O’Rourke has won lucrative contracts for several high profile publicly-funded projects.

Laing O’Rourke is also the principal contractor building the multi-billion pound Terminal 5 at Heathrow, and the O’Rourke Group is bidding against its Millennium Dome construction partners McAlpine to turn the infamous tent into a 100m sports and entertainment centre.

O’Rourke, originally from County Leitrim in north western Ireland, long ago earned himself a reputation for being a tough negotiator who delivers the goods. The year before the Laing takeover, signs of an uncompromising ambition were emerging. The firm shocked the industry when it bought out the Irish concrete specialists Swift Structures and then promptly called in the receivers. The company had been owned by O’Rourke’s wife’s brothers, Jim and Matt Halligan.

But it was the takeover of Laing which earned him the greatest respect - even if it is grudging in some circles. According to one industry commentator: "He won’t speak to you and he likes to retain an air of mystery, but he’s a hands-on chap. He still likes to go around the sites himself - he’s not just a boardroom presence."

Building Magazine once summed up the businessman’s ascent to success as "a classic tale of hard work, innovation and ruthlessness." The magazine’s news editor, Tom Broughton says that if the general public don’t know who O’Rourke is, that’s far from the case in the industry.

"Ray O’Rourke is one of the best-known figures in the construction industry. In 2002 he won the personality of the year prize at the Building Awards.

"He has a fearsome reputation throughout the industry. He is notorious for being a very tough businessman, and he is understood to not suffer fools gladly."

That combination will be put to the test still further as O’Rourke attempts to build his company into a multinational. "O’Rourke has recently built a new multi-million pound HQ in Thurrock, Essex. Since the acquisition of Laing it is understood that he now plans to turn his new Laing O’Rourke empire into a 5 billion turnover main contractor."

It seems his plans are well on course and, as another industry source says, it would not be a surprise if he succeeds. "The takeover of Laing transformed him from a specialist subcontractor into a major player. He has come up in the world to become one of the big boys."

No doubt the company’s plans will be helped by the millions it’s getting from the Scottish Parliament.