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Network Rail told to ensure contractors deliver whole life cost benefits

Network Rail is set to come under increasing pressure to appoint contractors to schemes based on their ability to provide a whole life costing approach, Construction News understands.

The Office for Rail Regulation is concerned that at a time when tender prices are providing increasing value, Network Rail are failing to prove they are not simply taking the lowest cost approach.

An ORR spokesperson told CN: “We are not convinced that Network Rail is doing everything they can to ensure the contractors are being selected on a whole life performance basis.

“Network Rail could, if it wished, get contractors to put in a minimum price bid but the infrastructure could be failing and imposing expensive maintenance needs.

“We want to identify when Network Rail selects contractors and rewards them to do the right thing through whole life costs. We know they are under commercial pressures but it will be a question we ask over the next few months.”

The ORR is believed to be reasonably pleased with the performance of contractors employed by the rail body at present on a variety of schemes.

However two quality reports presented to the ORR in July on the £103m Bletchley remodelling ccheme and the Edinburgh Waverley steps refurbishment project found insufficient evidence the project will deliver an overall minimum whole life cost solution.

Carillion and Morgan Sindall were among the contractors who won work on the above schemes.

The ORR is set to increase pressure on Network Rail over the coming months as it organises inspections of projects.

The spokesperson added: “The way forward is to look at what’s happening on the ground both early in projects and those already on site in the construction phase and we will be working over the next few months to see more projects.”

“Where appropriate we want Network Rail to show us they will be using appropriate procurement and assessing contractors and asking the right questions in terms of options for design and build solutions.”

Network Rail is set to present the results of its mid-year review covering all performance plans on the network to the industry’s National Task Force later this month.

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