AECOM Employs Modular Approach To Fast-Track Surgical Hubs

Global construction giant AECOM is using the modular approach to deliver four of six surgical hubs for the Health Service Executive (HSE) of the Republic of Ireland (ROI), which manages the country’s public health and social care services.

AECOM is employing a rapid-build construction solution, which uses a single design across three sites to help expedite the decision-making process and delivery of the projects.

“AECOM is proud to support the HSE’s efforts in this key area, building on the deep bench of expertise held by our team in Ireland as they help deliver critical infrastructure across the country, ” says Stuart Griffin, Director for Ireland at AECOM.

What is the modular approach?

Modular construction is a building method where structures are manufactured in repeatable sections in an off-site factory and then assembled on a building site.

While the modular approach has existed in construction for at least 200 years, the industry is now using the method to address current pressing challenges.

These include global labour shortages due to an ageing workforce and the reduction of new talent entering the industry, slow construction-productivity growth, housing shortages and CO2 emissions.

Modular construction is helping enhance the industry’s productivity, reducing the need for manpower by up to 40%, and accelerating timelines by up to 50%, says management consulting firm, McKinsey & Company.

It can also help save costs when executed properly and at scale, while also potentially reducing CO2 emissions.

As McKinsey highlights, developments in technology, data and automation are helping construction companies optimise the approach. 

For example, new digital platforms can connect customers across the ecosystem with suppliers, while also allowing companies to more easily customise and enhance their designs for specific sites.

McKinsey has identified more than 700 companies currently operating in modular construction. More than 100 have existed for 50 years or more. However, more than 200 companies were founded in the past 20 years.

A fragmented modular construction sector

According to McKinsey’s analysis the modular construction sector consists of a few large players and a long tail of more than 500 smaller ones with less than €50m (around US$57m) in revenue. 

Overall, it reveals that most companies in the sector are successful, showing robust profitability or strong growth, with those using the modular construction method on permanent buildings weighted an average EBITDA of approximately 7%.

However, it should be noted that while some companies have scaled in size in recent years, and even grown to international level, there have been a few bankruptcies. Profitability varies significantly for companies in the sector.

Vertically integrated companies tend to fare better than others. For example, firms operating in modular manufacturing and assembly tend to have higher earnings before interest, taxes, depreciation and amortisation margins (EBITDA), averaging around 15 to 20% EBITDA compared to companies that only offer modular manufacturing, which average 5% EBITDA.

The success of these vertically integrated firms can be specifically attributed to their broader scope, their ability to organise more efficiently as their teams are specifically trained to cover a broader modular system, and their minimal pass-through of costs to subcontractors. 

While around 60% of players serve the single-family homes segment, profitability appears to be higher for firms which deliver more specialised assets, such as hotels and healthcare facilities.

AECOM’s ROI surgical hub projects

Demand for healthcare in Ireand is at an unprecedented high. The HSE’s surgical hubs are meant to reduce waiting times ahead of the rollout of its Elective Hospital programme, a major healthcare reform initiative which is designed to separate scheduled (routine) procedures from unscheduled emergency care to reduce patient waiting lists.

The standard design approach required simultaneously maintaining consistency, control and coordination of the projects , which AECOM says facilitated a cohesive delivery across the three sites.

All stakeholders had to make decisions based on programme-level considerations and requirements rather than focusing on a single location.

AECOM therefore took a holistic approach for each stage of the projects with the three sites being procured under a single tender process. 

It also applied the same approach to cost management, allowing consistent planning and budget targets, cost forecasting and performance data to maintain alignment across the three sites. 

The collaborative, standard design approach has proven successful, says AECOM, with planning applications lodged within four months and approvals secured within ten months of the appointment of the teams by HSE. 

Overall, using standardised designs, helped it deliver multiple projects efficiently – despite constrained industry resources. 

AECOM’s key partners:

HSE (Health Service Executive)

The government agency that manages all public health and social care services in the Republic of Ireland and the client on the surgical hubs programme.

JJ Rhatigan

The design-and-build contractor for the Limerick, Waterford and Cork hubs, on a €162m (US$184m) project with construction having started in September 2024.

O'Connell Mahon Architects (OCMA)

O'Connell Mahon Architects (OCMA) led the integrated design team, working with the HSE and JJ Rhatigan as D&B partners, and was novated to the contractor.