Network Rail bans retentions to support supply chain | Construction Buzz #172

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NETWORK RAIL

Network Rail is banning retentions and moving to the use of project bank accounts in the upcoming five-year investment programme.

The move signals the shift towards protecting the tier 2 supply chain in the wake of Carillion’s collapse.

Its overhaul of the way large contractors do business with their supply chain also includes payments to suppliers within 28 days of work being carried out.

Colas Rail, VolkerRail, VolkerFitzpatrick and Amco were among the first contractors to endorse Network Rail’s new terms and conditions for control period 6.

Stephen Blakey, commercial director at Network Rail, said: “Culturally, this sends a huge signal as to the value we place on a sustainable supply chain and the way we want to do business.

“We recognise the challenges faced by smaller suppliers and are in a position to influence the way work on our railway is delivered and paid for.

“It is in our interest to have a sustainable supply chain at all levels – they are vital to the successful delivery of our projects and the safe operation of Britain’s railway.”

He added: “The changes will make a significant difference to smaller suppliers in particular, who rely on regular cash flow to operate successfully.

“We want to foster an environment that is fair, sustainable and encourages growth; but this is not at the expense of our larger suppliers.

“The changes are something our major contractors are very supportive of and we continue to work closely with them to help manage this effectively. For instance, we have created best practice T&Cs to adopt with their own supply chain,” added Blakey.