The same reasons for the current lack of microtunnelling contracts are being given today as five years ago: high risk, low profit, lack of standardised sizes, and contract structure, being the main contributing factors to the stagnant mature markets. In an industry that depends upon a steady flow of work to maintain its economic viability, it is becoming apparent that a stand-off is occuring.

Utilisation of small bore techniques
There is no doubt huge potential exists for future utilisation of microtunnelling techniques, a fact that has been re-affirmed by continued support from machine manufacturers and the majority of contractors. The development of pilot bores, guidance systems and mixed face technology for small bore machines, mean longer, curved drives through mixed ground are now possible. Future developments, such as settlement control systems and seismic probing ahead of the machine, have the potential to also remove major risks.
However, at present, mature markets have been experiencing a fall off in available work, while developing markets are both unstable and/or lack the necessary funding to embark on their much-needed public utility programmes. If the disadvantages are the same today as five years ago, what are the real underlying reasons for this current decline?
Many feel that it is due to the continued failure of the marketplace to pick up on the environmental advantages and ‘benefits of scale’ of microtunnelling alternatives. As Mark Turner, divisional director for AMCO Donelon in the UK puts it: “the industry is weary from waiting for major utility clients to pick up the environmental baton versus the apparent, but potentially false, perception of cheaper open trench solutions.”
David Monier, construction manager for Robinson Construction in the US agrees. “Obviously the most attractive system is for the work to be specified or mandated as microtunnelling,” he said. “Otherwise we need lump sum bids with a contractors option for the installation technique – contracts that include unit prices don’t work very well when you are considering optional installation techniques.”
“Owners rarely consider the damage they do to local business and trade by closing roads and having open trenches for long periods of time,” says Colin Pigott of Pigott Shaft and Drilling (PSD) in the UK. “Utilities and clients should be encouraged to minimise these disturbances to third parties and if encouragement does not work, they should be charged for the inconvenience to others, with the charges going to the local authority, thereby benefiting the local economy.”
Numerous trade associations and organisations have been campaigning for the introduction of these types of tariffs for many years, but their efforts continue to fall on deaf ears. There is no real argument against the necessity for minimum disruption techniques in congested or environmentally sensitive areas. However, many clients and contractors maintain that this does not mean trenchless technology should be mandatory (T&TI September 2001). The emphasis, they would insist, is on retaining and increasing flexibility, not reducing it.

Microtunnelling contracts
Another argument is that the nature of microtunnelling simply does not mesh with current contract set-ups that rely on the client’s knowledge of the industry, and the engaged consulting engineer’s willingness to specify the technique. Ralf Diesing of Lovat mts in Germany, points out: “There is still a large gap between the people with knowledge but lack of influence, and those without the knowledge but with a lot of influence.”
Consultants are, at the end of the day, only going to design what the client requests and most are unlikely to recommend what is often seen as a higher-risk alternative. A better approach may be to adopt different forms of contract. For instance, would Build Operate Transfer (BOT), design-build, or Private Finance Initiatives (PFI) provide a better structure for increased use of microtunnelling? The trouble is the vast majority of microtunnelling projects are just too small to warrant this type of contract arrangement.
In the UK nowadays, much more work is acquired through framework agreements, either directly with the client or as the specialist supplier to a larger framework contractor. “The emphasis is on building relationships by offering an open approach, identifying the risks early and assisting the client in managing those risks” says Turner. “Tunnelling and microtunnelling are risk management businesses, they always have been, but the emphasis now is to bring the commercial risks out into the open as early as possible so they can be fully discussed and understood.”
Many of the established microtunnelling contractors retain their small bore equipment and specialist personnel, which they will use when the opportunity arises, but few are actively seeking the work. “In the past year our focus has been on projects other than microtunnelling and we have not been actively marketing for this type of work” confirms Monier. Neil Hayes of UK contractor Byzak, agrees: “Procurement strategies of water companies dictate who works for them. Traditional tendering has almost disappeared unless you are prepared to work as a subcontractor, which we are not.”
After the failure of the joint company Miller-Markham in the early 1990s, Morgan Tunnelling of the UK (previously Miller) also has no immediate proposals for re-entry into the market. “We will only consider re-entry if we can see a ‘back-to-back’ run of projects emanating from our water company framework deals,” says Chris Hughes, managing director. “We have, and will continue to retain, in-house skills to undertake this work. On several occasions we have rented equipment to undertake microtunnelling ourselves rather than sub-contract it. We will continue to follow this strategy where we believe we are better able to handle the risk than a sub-contractor.”

The continued efforts of organisations such as the North American Society for Trenchless Technology (NASTT) and the Pipe Jacking Association (PJA) in the UK, to educate current clients and consultants, as well as engineering students, will undoubtedly go some way towards positively promoting microtunnelling. The NASTT, for example, has recently established an education fund, intended to supplement its current training and education programme. Money for the fund is being raised through industry events, such as NASTT’s first annual auction, which raised over $25,000 and proved to be one the social highlights of No-Dig 2002.
However, it is still to been seen whether these efforts will really bring about the desired result. If clients do become convinced of the benefits of microtunnelling they may not be willing, or indeed able, to justify spending the extra money. In order to do this they will have to, in turn, educate the general public. Many recent examples can be given to demonstrate the influence of the general public in tunnelling projects (both positively and negatively), and it is the public who potentially benefit the most from the increased application of microtunnelling.

Future markets
The requirement for sanitation and clean water supply infrastructure in developing countries, and the replacement of old systems in developed countries, will be the biggest source of future work for the industry. A fact that was highlighted at the recent World Summit in Johannesburg, South Africa (T&TI, September 2002, p5).
The current lack of available funds will have to be addressed in order to embark upon these projects, as Thorsten Weimann, sales manager for Herrenknecht‘s microtunnelling unit, points out: “Without a higher percentage of BOT projects in the world, the financial capabilities of governments will not be sufficient to finance all of the necessary projects.”
However, manufacturers already seem to be looking towards emerging markets, in order to establish offices and client bases. This is very much the case for AGD Equipment Limited (Iseki Division) and Lovat mts, both of which are in their first year of trading (Iseki having recently been acquired), and are looking to boost existing sales and lease agreements, by targeting Eastern European, Middle Eastern and African countries.
In mature markets, such as the UK and Western Europe, contracts are also likely to increase over the next two to three years. The current backlog of work that has been building over recent years, combined with new directives on the pollution of rivers and costal waters, should further encourage the upgrading and replacement of old sewer systems, and present more opportunities for microtunnelling.
With a new era of regular contracts on the way, manufacturers and contractors, who maintain their flexibility and resolve, will be able to fully demonstrate the potential of small bore technology.

&#8220the industry is weary from waiting for major utility clients to pick up the environmental baton versus the apparent, but potentially false, perception of cheaper open trench solutions.”

Mark Turner, divisional director for Amco Donelon in the UK