Network Rail to overhaul £6bn procurement programme

No comments

Rail operator looks to cut costs by opening up major projects to leading construction and engineering firms

Network Rail said today that it will radically overhaul the way it works with suppliers to deliver £6bn of rail projects as it attempts to reduce costs and generate better value from its major investment programme.

The move will open up Network Rail’s biggest rail projects and programmes to leading construction and engineering firms at an early stage. It is hoped this will enable them to create value throughout the development process.

The reforms will create “joint-venturing”rail delivery teams, which will enable Network Rail to capitalise on the “expertise and innovation” that private enterprise can bring to reduce project delivery costs.

To help develop the proposals, Network Rail hosted a summit last week with the bosses of 25 of the country’s biggest construction and engineering firms as it attempts to fully engage with suppliers and seek their support in refining how the new contracting strategy will work.

The move will enable Network Rail to adopt a more market-led approach to project delivery, helping the company identify where costs can be cut across its renewals and enhancement programmes.

Early involvement will see suppliers fully integrated into Network Rail’s delivery teams to develop project options and deliver the best solutions. Opening up schemes to suppliers in this way will enable Network Rail to deliver its projects faster, safer and more efficiently while creating better value throughout the development, design and delivery processes.

In drawing up the reforms, Network Rail looked at what worked best in other industries in the UK and across the world, and consulted extensively with its suppliers and trade associations on its plans.

Commenting on the programme, Network Rail’s director of investment projects, Simon Kirby, said: “The rail industry must reduce costs and these radical reforms will revolutionise the way we deliver our projects, helping to slash red tape and restrictive bureaucracy while generating significant cost savings and efficiencies.

“By ’joint-venturing’ with our suppliers in this way, we can create an environment that fully integrates our delivery partners into our projects to achieve a common goal, helping Network Rail deliver a bigger, better value railway.”

The seven projects and work programmes included in the first phase of the roll out are: