Construction consortia: Do they serve any real purpose?

Construction of large and complex projects is invariably carried out by firms working with others in joint ventures, special purpose vehicles or consortia. Several reasons have been given for the creation of consortia in construction. They enable firms to undertake larger projects than they would be able to consider on their own. They allow firms to take advantage of the expertise of a wider range of specialisms. They spread the risk of large projects over a number of firms. Although consortia provide a useful solution to a number of obstacles facing firms in the development and building processes, are these benefits won at a price? Working as a consortium presents particular difficulties owing to the early and close working relationships often formed between firms at pre-tender stages. The benefits of consortia (i.e. balancing risks, conflicts, gains and losses) are tested against the assertion that only when property and construction firms are vertically integrated in consortia are conflicts reduced. Several interviews with participants in the building production process provide evidence that construction consortia per se are found not to increase or reduce perceived risk to firms or to increase or reduce perceived conflict between them. The real transformation process is the same regardless of the arrangements between the parties.