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Can more work mean less friction?

The advent of Crossrail last year marked the start of an exciting decade for contractors working in the UK rail sector.

But a squeeze on resources means professional and trades staff will be pushed to the limit.

Construction works on the Olympics and the Thames Tideway beginning in earnest over the next 18 months and there are countless medium size jobs out there for firms to sink their teeth into.

Costain rail director Ken Stewart thinks this is not necessarily a bad thing but that it’s only through collaborative working with clients that huge projects such as Crossrail can become complete successes.

“Without a doubt our biggest challenge is resources. We need to get the right skill base on board from the design team through to the project managers and everyone in between,” he says.

And though the supply chain may seem like a crowded place, any extra resources would be welcomed. In particular in specialist areas such as overhead line workers or track engineers.

Mr Stewart believes this would bring more competition and better value to a sector where the market can still be opened up.

“For example rail sites are divided into red and green,” he explains, “Where red sites indicate a danger of rail traffic. If Network Rail could ensure more work is done on green sites then we’d have more people qualified to work there.”

As one of the country’s biggest rail contractors Costain attracts plenty of graduates, senior managers and labourers to its ranks. But Mr Stewart says with staff it’s a problem of quality rather than quantity: “We’re lucky enough that we don’t really have to advertise, people mostly come to us. But by far the hardest part is then rooting out the genuinely good and talented people.”

One way Costain makes sure it attracts the right people is by taking part in recruitment fairs, both at universities and trade shows.

“The most attractive thing for people interested by the sector is a company that’s won an exciting project,” Mr Stewart believes, adding “What’s particularly exciting for us is that’s an area where Costain excels”.

Since Network Rail took over the operation of the nation’s railways in 2002 Costain has been involved with its maintenance, renewal and building works. But the client has faced criticism from contractors in the past for squeezing its supply chain and generally proving to be hard work.

Attitude adjustment

Mr Stewart says that things are changing: “We’re seeing it with the Thameslink programme where Network Rail has been very open about the fact that they want to become a better client. They’re focusing more on quality for the first time and are looking towards early contractor involvement,” he says, adding “I’m very impressed with the senior team they have in place. They have a good ethos and recognise that they need to become attractive to suppliers in these busy times.”

And although Network Rail has a near monopoly on railway works across the UK, London Underground also plays its part, particularly for firms like Costain who focus mainly on London and the South East.
Fortunately Mr Stewart is getting the same sense of forward thinking from LU.

“Since resources are so scarce it’s about removing complications. Bringing in the contractors as early as possible is vital to establish a collaborative working relationship. That way both sides can avoid a duplication of resources,” he says.

But the earlier a contractor comes on board the less competitive the job becomes in terms of price, so how can a client justify this procurement method?

“It’s all about trusting the person that you’re paying to do the right thing,” explains Mr Stewart. “The ultimate in value is seen in the net cost of the project and everyone on the team needs to be focusing on that.”

He concedes that contractors need to up their responsibilities too: “We need to focus more on what the client actually wants. To help them see what the big trends with customers are and how we can best satisfy their needs. It’s about the contractor understanding the customer’s customer.”

For the moment Costain’s rail division remains focused on London and the South East, including Reading, where the main body of civil engineering and building works in the rail sector are taking place.

Station focus

In the immediate future stations are one of the key focus areas for the firm. The £400 million upgrade of London Victoria and the £350 million revamp of Reading are two of the main projects it will want to get involved in.

Further north the £550 million works at Birmingham New Street are also of interest but Mr Stewart says that the job is a pretty complex arrangement and that Costain will decide on whether to go for it once things have settled down.

“We’re always keen to keep a view on more diverse opportunities,” he says. “Scotland is always of interest. There are some chunky projects coming up up there and we’ll be keeping an eye on things.”
With so much work going on it’s amazing that one job has remained the talk of the trade for the last six months and shows no signs of waning. But then the buzz surrounding £16 billion worth of Crossrail has been building for well over 20 years.

And the project falls right in with Costain’s expertise.

“It’s exactly our area, that’s why we’ll be incredibly focused on it. With that I mean my rail section and the company as a whole. We’ll be looking at all the station works and the tunnelling jobs,” enthuses Mr Stewart, “It’s such a massive thing for the UK and we want to be a significant player in it.”

At the moment both home grown contractors and European and Japanese players eagerly await details of how the whole thing will be procured.

A Optimised Contractor Involvement strategy will be used, though no one knows yet what exactly that will mean.

“We’ve heard that contractors will probably come on board when the design is around 70 per cent finalised,” Mr Stewart says, adding “It’s all becoming more and more real. Now we’re just waiting for things to start happening.”

Until then it’s all go in what remains one of the most exciting sectors for UK construction.

Mr Stewart agrees: “Rail is and will remain a clear priority for Costain. It’s a long term investment that goes beyond the Olympics. You can’t beat that.”

Calls for change at Network Rail

When Network Rail published its Strategic Business Plan last November contractors welcomed the volume of activity but reservations remained about the operator’s capability as a client.

In response the Railway Industry Association organised a series of discussions to see what suppliers wanted from Network Rail to ensure the successful completion of the planned work.

Key recommendations include:

• More efficient procurement from Network Rail. Gaps in suppliers’ work banks make jobs difficult to manage, especially at a time when the industry is so buoyant.

• The bundling of smaller jobs into framework-type contracts to provide a focus for contractors, thus creating efficiencies.

• The use of major contractors to manage projects, enabling the planning and project skills of suppliers to be utilised. This will become more important as major projects like Crossrail and Thameslink take off as many of the best people will be drawn to work on them. This is already being trialled at Birmingham New Street, where a contractor will work with Network Rail to manage the project.

• Network Rail should train special-shortage skills, given that it should have better market knowledge than any individual supplier.

Network Rail has already taken steps to implement some of the recommendations and so far contractors are happy with the ethos of its senior management.

But some feel it’s all a case of too little too late.

One contractor source says: “There’s always such a long wait between when a contract is issued and when the work begins. It’s all stop start. That doesn’t really encourage us to invest in training or developing our staff.

Another told Construction News: “Network Rail also needs to take responsibility for its own actions. The debacle at Christmas where it blamed all the contractors working on the job, rather than those who were actually there, did its reputation no good whatsoever.”

Whatever the way, it is clear that the rail operator needs to establish itself as a desirable client. In these booming times it can’t afford not to.

Spending the cash

Crossrail £16 billion

Thameslink upgrade £3.5 billion

Reading station revamp £400 million

King’s Cross remodelling £153 million

Birmingham New Street £550 million

Glasgow airport link £170 million

Airdrie to Bathgate line £145 million