Network Rail announces £1.5bn framework agreements

Network Rail has today announced new framework agreements of up to seven years to deliver railway signalling projects worth approximately £1.5bn – part of wider reforms to Network Rail’s infrastructure business, with a greater focus on partnership with suppliers and a restructuring of the way the company delivers capital projects.

Network Rail intends to award framework agreements to Invensys Rail, Signalling Solutions and Atkins, which cover the majority of signalling renewals and enhancements across England, Scotland and Wales. The agreements, which are expected to commence on 2 April, will operate for the remaining two years of control period 4 and can be extended by Network Rail to cover the whole of control period 5 (2014-19).

The new framework agreements form the backbone of Network Rail’s programme to modernise and maintain safety-critical railway signalling systems and are designed to deliver the efficiency savings required across the company’s signalling work bank over the next seven years through further reductions in unit costs.

Simon Kirby, Network Rail managing director, infrastructure projects, said: “Network Rail is continuing to drive down the costs of Britain’s railway and is committed to meeting tough efficiency targets. As the number of passengers and companies that rely on Britain’s railway continues to rise, the safety-critical systems we use to run a safe and efficient railway are more important than ever.

“These new frameworks represent a seven-year commitment by suppliers, allowing us to work closely with them to develop long-term plans for work to be carried out more quickly and efficiently. The length of the agreements, coupled with a visible workload, will provide much-needed stability throughout the supply chain and drive further cost savings and innovation across our signalling renewals and enhancements activities.”

In line with Network Rail’s new approach to supplier engagement, the frameworks incorporate collaborative working in order to deliver the necessary efficiencies. Integrated design teams and a reduction in man-marking will remove costly duplication of effort, while smoothing of peaks and troughs in Network Rail’s work bank will allow better use of suppliers’ resources.

Nick Crossfield, Invensys Rail’s UK president, said: “We are delighted to have been successful in the tendering process for these framework contracts. Key to our tender submissions were innovative approaches to both technology and project delivery, together with a further continuation of unit cost reductions.

“In addition to our absolute focus on safety, we strive to achieve excellence in technology, innovation, delivery and value and we look forward to working in close partnership with Network Rail to continue to deliver projects that provide safe, sustainable and reliable solutions.”

Steve McLaren, managing director of Signalling Solutions Ltd, said: “The award of these large volume frameworks confirms Network Rail’s confidence in Signalling Solutions and brings both security and growth to our company.

“The visibility and long-term work bank allows Signalling Solutions to continue to invest in people and technology to achieve the necessary cost reduction targets for the future. We look forward to building on our strong relationship with Network Rail to achieve our collective goals.”

Uwe Krueger, Atkins’ chief executive, said: “This is a notable win for our UK region and a credit to the excellent long term relationship that our rail business has built up with Network Rail. We pride ourselves on being an engineering partner that understands the challenge of maintaining one of the world’s busiest and most complex rail networks and this new signalling programme is a critical element of that.

“The contracts give us the opportunity to demonstrate the breadth and depth of our rail business’ signalling expertise, sharing international best practice and innovation and delivering the management rigour that will bring value for money for one of the public sector’s most important players. The move to longer term contracts will also allow us to plan with greater confidence and deliver further efficiencies for Network Rail as a result.”

The new frameworks appoint both a primary and secondary supplier for each area. This provides the flexibility needed to meet the significant increase in volumes required over the life of the framework and provides an alternative in each area if the primary supplier does not have the capacity. The agreements also provide the option to competitively tender up to 20% of the predicted workload each year.