NAO blames poor procurement for rail overspend

22 November 2006
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22 November 2006 | Hana Yoosuf

More effective procurement could have reduced Network Rail's £300 million overspend in the West Coast Main Line modernisation, according to the National Audit Office (NAO).

Network Rail is set to finish £300 million over the original £8.3 billion budget to complete the overhaul of the operation, which began in 2002.

In the report released by the NAO today, recommendations include improved recording of maintenance and renewals costs, addressing whole-life costs and ensuring the suppliers' responsibilities are clear from the outset. The report also found the absence of a support contract as part of the procurement deal was a costly oversight.

In addition, the NAO is recommending the adoption of best practice in "obsolescence management", for instance, minimising the impact of losing a supplier or shortages of raw materials, which would have reduced not only excess spending but also avoided severe delays to the completion of the project.

Edward Leigh, MP, chairman of the Committee of Public Accounts, claimed this saga emphasised the need to "get a grip on large-scale projects before they run out of control".

SMnov2006

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