Light at the end of the tunnel

In July when Metronet went under, one of the biggest problems was its station refurbishment programme: it was behind schedule and over budget. Metronet thought it had done more than the PPP contract required but London Underground didn’t want to foot the bill.

Meanwhile, the other PPP outfit, Tube Lines, was boasting that it had managed to slash upgrade programme durations from between one and two years to six to nine months. Granted, it has far fewer lines to deal with three as opposed to nine but it has also adopted a different method to Metronet.

That approach can be summarised thus: get on with it, get rid of main contractors because they won’t take any of the risk inherent in working with a live railway, and don’t get cosy with the client because you’ll lose control of work outside the contract.

Tube Lines, which signed its 30-year concession in January 2003, has to upgrade 97 stations by 2010. So far 47 are complete.

The success of the Tube Lines approach can be seen at its latest project: the £11m modernisation of Euston station. CM spoke to the project manager to get a first-hand view on how things are progressing (see panel opposite).

The upgrades differ in intensity depending on when the stations were last refurbished.

A modernisation involves changes to floors, walls and lighting, whereas a refurbishment is more like a deep clean and some heavy maintenance. In between is what’s known as ‘enhanced refurbishment’.

The extent of work at each station was a matter for negotiation with London Underground for both Tube Lines and Metronet. But while Metronet refused to start work until everything was agreed, Tube Lines ploughed on. ‘At the end of the day, they can say you have not finished everything, but that’s a very different risk from not doing it,’ says Amjad Bangash, Tube Lines’ delivery manager for the station upgrades.

Certain stations must be finished by set dates. Failure to do so incurs penalties, or ‘abatements’, which vary from £50,000 per four weeks for a refurbishment up to £200,000 a month for a modernisation programme.

It has been suggested that Metronet’s model of using shareholder companies as contractors was part of its downfall. Bangash disagrees: ‘I don’t believe that using firms from the shareholders is the main issue. The issue for me is whether you have robust contracts and management systems in place that provide the necessary checks and balances. This is to ensure suppliers are not total masters of their own destiny and contractors at the same time.’

Tube Lines has adopted a different procurement strategy. At the start, firms such as Gleeson, Birse ,YJL, Clancy Docwra and Fitzpatrick were brought in to run the station refurbishments, a model inherited from London Underground. But since June 2006 Tube Lines has used a construction management type approach using in-house staff. It employs labour through several labour agencies with only specialist work such as tiling farmed out to contractors.

‘The reason we ended up with the CM model was pure and simple: we were best placed to manage the risk ourselves,’ says Bangash. ‘There are too many risks. It is an operating train line, things are going to happen. It’s all about risk management and change management.’

Tube Lines is confident it has got a good team of subcontractors on board for the station programme working under the optimum management model for the job.

The trick now is to fine-tune the process to promote cost savings it has a target cost reduction of 50% while speeding up the work.

More efficient ways of working are being identified continuously under the new system. Phil King, Tube Lines’ lead area manager for central London, covers Euston as part of his brief of overseeing work across some of the capital’s most famous stations.

He is constantly working with the Tube Lines managers and the trade contractors to find better ways of modernising stations.

‘Under the previous model there was no incentive to innovate for the principal contractors, but that is no longer the case now we are directly in charge,’ says King. He cites the example of buying materials. Previously each principal contractor bought their own materials, now Tube Lines bulk buys them.

Practice is making perfect on the station sites where a stable team of trade contractors is reaping the benefits of repeat work. ‘Station work is very repetitive,’ says King. ‘You are doing the same sort of work on each job replacing facings and finishes, relighting, installing mechanical equipment, CCTV and PA systems.

‘The learning curve at the start is the painful thing, but then it’s all about becoming more efficient as you go along.’

A major problem on the underground has been the amount of downtime. Workers are paid for a full eight-hour shift between 10pm and 6am, but have often only worked in the past between one and five in the morning when the station is shut. ‘We’re paying them for that time, so now we find them something to do,’ says King. ‘Briefings and preparatory work goes on before the station shuts so that as soon as the power goes off on the lines the whole team is ready to go in and get on with it.’

Despite the drive for greater efficiency the main factor slowing down the station programme is a lack of longer closures. Overnight work is limited by having to start from scratch every evening, then having to pack away and clean up after only four hours.

Under the old model, Bangash could not interest main contractors in weekend work, whereas with the CM model Tube Lines can take full advantage of weekend closures, racing ahead with work. However, it faces a constant battle with London Underground to sanction shutdowns.

Another benefit of the CM model is that construction can start before design work is complete, whereas design has to be at a certain stage when employing a main contractor so they can price a job. ‘When we need to value engineer something, we can go back,’ says Bangash.

Traditionally, Tube Lines has worked with principal designers, employing firms such as Amec and TPS. Now it is considering doing more work in-house and using smaller firms, replicating the CM model from site.

This more efficient way of managing refurbishment doesn’t address the issue of how to cope with the inevitable changes which come with such a PPP. Tube Lines, like Metronet, has had to cope with many. Bangash gives Stratford station as an example: the Olympics have drastically altered what is required here.

The issue here is control. Bangash believes that because Metronet and London Underground were working together in the same offices, personal relationships formed and work was not necessarily agreed on a strictly contractual basis. Last year Tube Lines, which had also shared offices with London Underground, moved out. Now there is just one point of contact for any changes.

If Tube Lines is so good at station refurbishments, will it take on any of the jobs coming out of Metronet’s demise as has been speculated? The official line is that it’s too early to say. Bangash reckons that only stations which lie on Tube Lines’ as well as Metronet’s former underground lines would be viable. cm