Latest Rail News

21.06.18

Thousands of SMEs to benefit from rail contract changes

Network Rail will be changing contract terms between subcontractors and suppliers in an effort to benefit thousands of small medium enterprises around the country.

The publicly-financed organisation will now require suppliers to commit to subcontractors within 28 days, as well as removing the use of retentions on those payments — an issue that has been hotly debated in the industry because of the negative impact it can have on smaller companies.

Removing retentions, which withhold large sums of money from sub-contractors until project completion, will allow smaller suppliers to be paid promptly and more reliably, which will “place smaller suppliers in a stronger financial position,” Network Rail 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,” commercial director at Network Rail Stephen Blakey said.

Network Rail will also continue with its ‘Fair Payment Charter,’ created in 2011 for the arrival of CP6 next year. The charter aimed to cut payment times to suppliers from 56 to 21 days, whilst suppliers’ own first-tire sub-contractors — typically SMEs — will be paid within seven days of the supplier receiving a payment.

Blakey said that the charter is was about recognising that cash flow is “the life blood” of every supplier, adding: “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.”

The use of project bank accounts on major projects will also be introduced, meaning payments to subcontractors can be agreed by the client and scrutinised more closely.

Andries Liebenberg, managing director at AMCO, said: “Network Rail’s introduction of sub contract payment terms and abolition of retentions is wholeheartedly endorsed by Amco. 

“This is an industry leading example of how to embrace the supply chain and demonstrates how we can all work together to bring efficiency, value, and a great service to our collective stakeholders and customers.”

Enjoying RTM? Subscribe here to receive our weekly news updates or click here to receive a copy of the magazine!

Comments

There are no comments. Why not be the first?

Add your comment

 

related

rail technology magazine tv

more videos >

latest rail news

Dawlish railway may be ‘moved out to sea’ to protect it from storms under new proposals

13/06/2019Dawlish railway may be ‘moved out to sea’ to protect it from storms under new proposals

The storm-battered Dawlish rail line could be “moved out to sea” and away from the “hazard” of the cliffs under new plans... more >
TfL awards contract for new DLR fleet to replace 30-year-old trains

12/06/2019TfL awards contract for new DLR fleet to replace 30-year-old trains

TfL has awarded a contract for 43 new trains to replace the oldest rolling stock on the Docklands Light Railway (DLR), with the first scheduled t... more >
Hitachi trains for Happy trains

10/06/2019Hitachi trains for Happy trains

ScotRail project manager Kirsty Devlin discusses the withdrawal of Class 365s, to be replaced with the brand-new Class 385 fleet. While Scot... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

rail industry focus

View all News

interviews

Advancing the rail industry with management degree apprenticeships

08/05/2019Advancing the rail industry with management degree apprenticeships

In answering the pressing questions of how current and future generations of managers can provide solutions to high-profile infrastructure projec... more >
Women in rail - is the industry on the right track?

12/03/2019Women in rail - is the industry on the right track?

RTM sits down with Samantha Smith, sole female member of the TransPennine Route Upgrade Alliance Leadership Team, to find out more about encourag... more >
TfN Strategic Transport Plan: not just for transport's sake

22/01/2019TfN Strategic Transport Plan: not just for transport's sake

Peter Molyneux, Transport for the North’s (TfN’s) strategic roads director, has been leading on the development of the seven economic... more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. ... more > more last word articles >

'the sleepers' daily blog

Apprentice to Co-leading the Rail Sector Deal

05/06/2019Apprentice to Co-leading the Rail Sector Deal

In a series of Q&A’s with key speakers on the run up to TransCityRail Midlands, we caught up with TransCityRail panellist and Amey&rsqu... more >
read more blog posts from 'the sleeper' >

comment

Hitachi trains for Happy trains

10/06/2019Hitachi trains for Happy trains

ScotRail project manager Kirsty Devlin discusses the withdrawal of Class 365s, to be replaced with the brand-new Class 385 fleet. While Scot... more >
Malcolm Holmes on new stations for the Black Country

10/06/2019Malcolm Holmes on new stations for the Black Country

Malcolm Holmes, executive director of the West Midlands Rail Executive, described the new stations set to be built for the Black Country region o... more >
The skills bottleneck: Dealing with growing apprenticeship demand

10/06/2019The skills bottleneck: Dealing with growing apprenticeship demand

Richard Turner, head of apprenticeships at Network Rail, details the reasons for growing apprenticeship demand in the rail sector over the coming... more >
A train journey on the Midland Main Line 15 years from now…

10/06/2019A train journey on the Midland Main Line 15 years from now…

Chris Hobson, director of policy and external affairs at the East Midlands Chamber, talks in detail about what travelling through the region will... more >