Network Rail’s boss is eyeing greater use of alliancing models in upcoming procurement.
Despite the organisation being set to become part of new body Great British Railways from 2023, chief executive Andrew Haines (pictured) said imminent procurement – for projects stretching beyond next year – will feature an increased element of alliancing.
The concept, backed by the recent Mosey review of frameworks, means different companies commit to working together to share risk and avoid blame on contracts.
Haines told journalists that alliancing has been shown to work in the utilities sector.
“There’s really quite convincing evidence that if you’re serious about alliancing and you create the right sort of contract structures then it delivers better value for money and a more sustainable solution,” he said.
Network Rail is preparing to go to tender in two regions for its multi-billion pound Control Period 7 (CP7) for 2024-2029, Haines said.
“In both of those, you will find alliancing as a key central plank,” he said. “[Alliancing] also allows us to address one of the long-standing criticisms of Network Rail – that we are too heavy-handed as a client and we add a lot of cost and a lot of risk aversion without necessarily adding the commensurate value. So, that is absolutely something that we are focused on.”
Plans for the Southern Integrated Delivery framework on its Kent, Sussex and Wessex routes were unveiled late last year and were described as “a step change in the way renewals are delivered” at the time.
Haines, who is also leading the Great British Railways transition team for the government, added that the model is not a panacea but can work well if clients provide clear briefs and have good relationships with the parties involved.
“We’ve been using two alliances on the TransPennine route upgrade that have been in place for a number of years. They were probably suffering in their early years from a project that wasn’t sufficiently well defined to get the right target costs. We’ve had to do a lot of work through that,” he said.
“You can’t play at alliancing. I think is one of the lessons from this is, you’ve got to be really deeply committed to it.”
Take-up of the concept has increased across government since consideration of its use was recommended in the Cabinet Office’s Construction Playbook in late 2020. Construction News revealed last year that the Ministry of Justice had picked four contractors to work on a £1bn new prisons programme under a new alliancing arrangement.
Elsewhere, Haines also revealed that Network Rail is preparing to open a compulsory redundancy programme in order to reduce its headcount under a programme that began in August. He said that 1,200 managers have left voluntarily, while the company has rejected applications for voluntary redundancy from around 1,000 other people it did not want to lose.
He said the reduction so far “will not be enough to meet the scale of financial challenge the industry faces” amid declining rail passenger numbers since the onset of the pandemic, and the company is talking to trades unions about the coming cuts.
Last year, RMT general secretary Mick Lynch condemned the redundancy plans.
“They are seeking to get the job cuts in first and organise the industry after,” he said in the summer. “The idea that we would sign up to this cavalier and dangerous approach is clearly nonsense.”
In October, Lynch called for the government to intervene to call a halt to the plans.
