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Cost savings from framework plant deals

Among Network Rail’s many framework agreements are two for the hire of small plant and equipment - one for railspecific plant, like rail saws and impact wrenches, and one for all non-rail plant like generators and lights.

The five-year national frameworks were awarded in 2005 to Speedy and HSS respectively, and replaced an ad hoc system in which Network Rails’ 23 UK regions all had their own arrangements for hiring and purchasing equipment.

Over the framework period the two hire companies have been able to reduce hire costs for the client, and work with manufacturers to develop products specifically for Network Rail’s needs.

One significant marker of the way the company’s attitude to plant hire has changed is the split between the amount of equipment on core (longterm) and spot (short-term) hire. Long-term, core hire rates are far lower than spot hire rates. When Speedy started its framework, only 60% of the rail-specific equipment was oncore hire, now 90% is either on core hire or directly owned by Network Rail.

Last March Speedy’s contract was changed so that rather than just providing equipment on hire the firm actually buys it on behalf of Network Rail.

“We transformed our arrangement from a traditional plant hire model to an asset management/maintenance model,” explains Speedy director of rail Dil Masters. “Our activity now is based around managing and maintaining Network Rail-owned equipment.”

Speedy recently bought more than £6M of rail-specific plant equipment for Network Rail, covering more than 5,500 pieces of kit, including rail saws, lightweight rail stressing equipment, alignment jacks and grinding equipment.

The company’s contract also involves ensuring all24,000 pieces of equipment that are on hire or directly owned are regularly maintained and serviced, and payment is based on key performance indicators that include the plant being fully compliant, tested and calibrated at regular intervals.

When the contract started only about 55% of equipment was being presented in time for servicing, but now 96% is in compliance.

Speedy also has to guarantee it will be on site within 90 minutes of notification that a piece of equipment has broken down, and has a national network of Network Rail-specific depots to ensure this can be achieved, as well as 70 mobile engineers with Personal Track Safety training, allowing them to work on the tracks. “Our policy is to do maintenance and testing on site,” explains Masters. “We don’t automatically bring in a new piece of kit. We turn up on site and service that piece of kit.”

This policy ultimately saves the client money, as it is not paying for back-up equipment in case of breakdowns.

“What we’ve employed is not necessarily a traditional hire model, we’ve applied a project management model,” says Masters, whose background is in civil engineering. “I’ve been able to apply my project management expertise into this framework arrangement, and I think we’ve gained a lot of ground with Network Rail because it’s not a cut and thrust traditional plant hire arrangement.

“Our main driver isn’t getting the kit out there,” he continues. “It’s what happens to the kit once it’s on site, and how can we make sure Network Rail is not let down.”

Although the rail sector was new to HSS when it won its framework in 2005, the company quickly grasped what would be needed to help Network Rail improve efficiency and safety, and was rewarded in July with a “highly commended” in the innovation category of Network Rail’s partnership awards. The commendation was in recognition of HSS’s attempts during the framework to keep offering new solutions, and new ways of doing things.

“The innovative side is listening to what the customer wants”

John Helm, HSS national rail director

“The innovative side is listening to what the customer wants,” says HSS national rail director John Helm. He cites the example of lighting, saying that the company started with quite a small range, but now offers products specifically tailored for different activities, like highly directional lights for welding, and lights that illuminate a wide area for inspecting points and crossings.

“We aim to take costs out of the business,” says Helm. “We’re not just here to give them a generator, but to suggest ways to use that generator in different ways, or with a particular attachment that would take some costs out.”

HSS supplies up to 16,000 pieces of equipment at any time - most on core hire. All are on fixed service intervals, and HSS has software that identifies each piece of equipment by serial number, location and when they need servicing.

The system can also highlight any bits of kit that have high fault rates, spurring the company to find out why - often resulting in discussions with the manufacturers to make the equipment stronger or introduce alternatives.

Both frameworks will be back up for renewal next year.

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