Almost 100% of NR's work in the first three years of CP5 went to UK-based companies © Stuart Dopson/Network Rail
Almost 100% of NR's work in the first three years of CP5 went to UK-based companies © Stuart Dopson/Network Rail

Network Rail begins £47bn procurement programme

21 February 2018

Network Rail (NR) has started a multi-billion pound procurement programme across its supply chain, which it says will benefit thousands of UK companies.

Last week, NR issued its Strategic Business Plan (SBP) for its next five-year funding period, 2019-2024, called Control Period six (CP6). 

The plan outlined £47bn of potential expenditure based on the government’s rail infrastructure statement of funds issued in October. 

The Office of Rail and Road will now review and consider NR’s plan and publish its draft funding determination in June and its final determination in the autumn.

Matthew Steele, NR’s commercial director, said UK companies in the supply chain would benefit from the "work-bank" set out in the SBP. 

“Significant investment in the country’s rail network will continue in the five years ahead giving thousands of companies – and our hugely important supply chain partners – the surety they need to invest their people, innovation and value for money,” he said. 

“The beginning of our CP6 procurement activity provides suppliers with a real opportunity to secure substantial work-banks and be part of delivering essential improvements that will help shape the future of Britain’s railway.

“For our part, we must remain a client of choice that engages with its supply chain in a mutually beneficial relationship, especially in what is poised to be a rapidly growing infrastructure market.”

NR is the UK’s largest infrastructure client, and it generated £22bn worth of work for the supply chain over the first three years of CP5 with 99% of the work going to UK based companies, according to the SBP. 

The organisation's division for renewals and projects, Infrastructure Projects (IP), arranges itself into four regional areas – Scotland North East, Central, Southern and Western and Wales.

It also has national programmes for signalling, track and the pan regional Northern Programme.

The Scotland North East and Southern regions are anticipated to hold the most significant work-banks for the coming five year control period, with over £5bn of renewals spend estimated per region in addition to substantial network wide upgrades, according to the SBP.

It said for the supply chain, the extensive renewals work-bank should provide opportunities across specialism, with the £4.5bn available for signalling and around £3.5bn for track representing the largest areas of expected spend. 

It added that considerable expenditure is also expected within structures, electrification and fixed plant, buildings and telecoms.

NR said to help improve efficiency for both NR and the supply chain, the tender and procurement process for CP6 would be phased.

This month, Scotland North East and Southern regions will both start their procurement programmes, with the remaining regions beginning the process between now and June 2018.

NR also pledged to improve communication of its expectations for behaviours, competence and performance, using national performance metrics and efficiency targets.

“We will reinforce standard approaches to improve cost control and benchmarking and build a culture of commercial accountability for what rail works should, will, did cost and why.”

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