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How to show your value to rail clients

Almost every aspect of Britain’s rail system is currently either changing or under scrutiny, says Philip Moss

There is a big workload to be delivered over the next five years in the build-up to 2012. Station upgrades on the London Underground, capacity enhancements as well as Crossrail, Thameslink and the Olympic Park interface works.

And as the public becomes more aware of the issues surrounding carbon emissions and the politicians try to manage transport behaviour through taxation, there will undoubtedly be the need for more multi-modal transport interchanges.

This is happening at the same time as the industry is gearing up to deliver the Olympics.

Against this background clients are looking to obtain best value. For the rail sector the challenge is to maximise the pounds invested in the assets versus those ‘wasted’ in administration.

Three key issues

The three key issues facing the industry are: price certainty, resource availability and skills and expertise.

So contractors need to demonstrate the value they can bring to the construction process. As pressure on the purse strings grows, clients are expecting more from their contractors than mediocre management for a large margin. Those who can deliver a quality product consistently will be much in demand.

The need has never been higher for competent, well-managed trade subcontractors or small-to-medium contractors with directly employed tradesmen willing to work in a challenging environment.

As clients move to relationships with fewer, larger contractors there is a need to show value through the supply chain. SMEs that can build relationships with the larger contractors, for mutual benefit, will see potential for a large pipeline of secure work.

Strengthen supply chains

The larger contractors and the industry need the SME firms with direct labour to continue training future tradesmen, but the trend within most sectors clearly sees clients looking to reduce the number of relationships they have to manage. This means the supply chains need to be developed and strengthened to meet this challenge.

Many of our rail sector clients are using the NEC suite of contracts. The challenges in administration that this brings especially for extended supply chains are significant.

If the large contractors do not build strong, trusting relationships with their supply chains, then the time limits introduced by NEC3 for submission of quotations and notification of compensation events will start to hit the industry hard.

Time barring the opportunity to secure recompense for change will have a potentially catastrophic effect upon the smaller contractors.

One of the biggest frustrations in the operation of NEC contracts is the flow of information up the supply chain, from subcontractor through to the project manager, to enable timely decision making.
If the supply chain can deal with this adequately this will minimise risk and improve the perception of the competence of the contractors.

Philip Moss is a partner with EC Harris