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HS2 commercial director reveals potential alternative procurement

High Speed 2 is considering a major procurement shake-up having held talks over awarding its systems and rolling stock works package first in a departure from traditional procurement methods.

In an interview with Construction News, HS2 commercial director Beth West said she wanted to get designers involved early to influence the project’s construction.

Ms West, who has the responsibility for cost and risk on the £42.6bn project, said she wanted to ensure collaboration across the supply chain so it wasn’t overspending on procurement.

Long-term thinking

HS2 does not want to design a project with assumptions that change in the future, as it will then have to rework them, she said.

“One of the big questions is how do we get the right contracts awarded in the right sequence to make sure we aren’t ‘overspecing’ other bits of the railway – it’s about cost and control, so making sure we aren’t massively gold plating things,” she said.

“The really interesting question is do you do the systems and rolling stock first, or do you go around it the normal way”

Beth West, HS2

“What we’re discussing, and I don’t know what the answer is yet, is whether or not rolling stock is actually the first contract we award.

“The question is that if you put rolling stock first, what does that then do to everything else… in terms of what you are building underneath the trains, and does the specification of the rolling stock make a difference to what the rest of the design is going to be. That is something we are going to be working through.

“For me, the really interesting question is do you do the systems and rolling stock first, and have the designers on board to influence the stuff that sits around and goes underneath it, or do you go around it the normal way – doing it as you need to have it built?”

HS2 rolling stock costs are estimated to be £7.5bn, including £1.7bn of contingency.

Procurement of Thameslink and Crossrail rolling stock has been controversial. Siemens was selected to provide trains for Thameslink, rather than Derby-based supplier Bombardier.

Plans for Crossrail’s £1bn rolling stock and depots to benefit from a UK Guarantee were scrapped last year amid fears of delays on reaching financial close.

Instead, the rolling stock contracts are now being 100 per cent publicly funded.

Crucial decisions ahead

At a supply chain conference in Birmingham last year, Ms West revealed the project’s proposed construction works packages for the £21.4bn first phase of the scheme.

HS2 chairman Sir David Higgins will publish a report on HS2 next month in which he is expected to state his belief that work should commence with the simultaneous construction of the Birmingham to Leeds and Manchester ‘Y’ network, and the London to Birmingham stretch.

This, coupled with the move towards eschewing traditional procurement methods by considering contracts for rolling stock first, has increased the importance of the industry making its voice heard in the coming months as crucial decisions are made.

HS2 packages

Tunnelling £2.9bn split across four main NEC3 packages with ECI.

Surface route £2.7bn split across three to six main NEC3 packages with ECI.

Stations £2.6bn split across four main NEC3 packages with ECI.

Rolling stock, depots, signalling £2bn+ bespoke single package.

EC Harris head of rail Mark Cowlard said while he agreed that bringing designers on board early was critical to the success of the project, he felt it was “only part of the solution”.

“HS2 needs to look at how to bring all of the supply chain on as soon as possible so it can make sure it approaches the project to deliver the constructability side of things as effectively as possible – bringing contractors on board to help it plan and think about the technical solutions.”

Ms West said the team was beginning talks with industry suppliers to gather feedback on a potential procurement timetable, as well as gathering responses on the project’s size and design.

She said a supply chain conference will take place this summer, when the team will announce its final works packages, after which the procurement will begin.

Collaborative working but no to JVs

Discussions are taking place within HS2 about using shared office space across the project to improve collaborative working.

“It’s not always a household name or a mega contractor who thinks of the good ideas; it’s the smaller companies further down the supply chain”

Beth West, HS2

Ms West, who was head of commercial for the Thames Tideway Tunnel project after spending eight years at the Transport for London in roles including head of commercial procurement, said experience had taught her to be sceptical of joint ventures.

She said a JV would have to demonstrate an ability to work “seamlessly” together to bag a contract with HS2, as she had witnessed the damage poor working relationships could have on a project’s delivery.

Targets for SMEs or regional contractors

Ms West said the team has not, and may not, set any targets for the amount of work it will guarantee SMEs and regional contractors.

But she added: “The big thing that we want to capture is that it’s not always a household name [or a] mega contractor who thinks of the good ideas; it’s the smaller companies further down the supply chain [who do this].”

The HS2 team wanted to encourage “innovation and application”, as well as learning from projects overseas.

Asked how she would respond to critics of the lack of targets for SMEs and regional contractors, Ms West said: “There is a huge amount of work to be done and a huge amount of opportunities [to get involved in] but you need to get yourself ready to take them.”

She added: “[For example], if you’re not interested in building information modelling then you are probably not going to win any work because we are so keen on working with BIM.”

The team is also looking to offsite manufacturing, which Ms West sees as an additional route in for small companies – either through direct contracts with HS2 or through main contractors subcontracting work.

Skills and delivering HS2 on budget

Ms West said there was currently a gap in the level of skilled workers in the UK, when rolling stock and manufacturing were taken out of the equation.

She said this skills gap was the focus for an upcoming HS2 report on the UK workforce, expected to be published shortly.

HS2 announced in January that it would open a new college, planned to be running by 2017, which would train engineers in the technical skills needed for the project.

Asked whether she was confident the team could deliver HS2 under budget as professed by Sir David, Ms West said it was important to be “realistic”.

“I am confident but that’s based on our current scope,” she said.

“We have to make sure we are realistic and that if there are scope changes, then there is a change to the budget that goes along with that, because if there are changes to the scope without changes to the budget it will be incredibly difficult to deliver.”

Ms West said there was still more to be done “to sell” working in infrastructure to women as “a means to an ends” rather than seeing it just as “a giant Meccano set”.

She said that, for her: “Infrastructure is… the seed thing that allows the rest of the economy [to grow].”

Kirby reaction

Asked whether she felt it was fair that incoming chief executive Simon Kirby, who will join the team in June and become chief executive in September, would be receiving around £250,000 more than the current female chief executive Alison Munro, Ms West said that “fundamentally it was a different job”.

She said: “Alison has come out a civil service role and was running a smaller budget so fundamentally it was a different job… when Simon is on board we will be spending billions so [there is a] big difference in what the role is.”

Ms West added that the real question should focus on future hires within HS2 and said the team needed to ensure people were paid equally for the same job, regardless of their gender.

She said Mr Kirby would notice a “big difference” but added it was a “great opportunity for him to make his mark and stamp down on the culture and the ways of working”.

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