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Design costs under fire from Network rail

Network Rail is to target design costs in its battle to cut more than £5bn from the cost of its current investment work.


Top of the list is a crackdown on design checks that are a complete rethink of original designs. Inadequate design work will also be targetted.

“We have worked out that we design everything 2.5 times,” a senior Network Rail board member told NCE. “We want to get that down to 0.8,” he added, highlighting the goal of dramatically improving design efficiency.

The ongoing study by Sir Roy McNulty into rail value for money - commissioned by the last Labour government - will also look at design checking as an inflated cost element in the design process, a member of the study team said.

“Designs need to be checked but we are aware that in some cases the checking engineer is in fact redesigning, which adds substantial extra cost,” he said. “We are also concerned that the checking process and the implied transfer of risk means that the original designer could feel less responsibility to get it perfectly right first time.”

Consultants’ opinions sought

He said that the McNulty study team would like consultants to suggest ways of cutting design costs.

Network Rail is being castigated by the Office of Rail Regulation (ORR) for being 40% less efficient than European railways (NCE last week). ORR has also asked for efficiencies in the current five year spending control period, asking Network Rail to deliver its programme for £28.5bn rather than the £31.2bn it originally estimated. Even with the £31.2bn figure Network Rail was already seeking substantial cost savings.

In June, outgoing chief executive Iain Coucher said it had already banked £1.2bn of the £5.4bn of savings required and had identified £3.5bn more, leaving £700M of savings still to find (NCE 17 June).

“Checks are in for good reason”

Andy Robson, Atkins

Contractors welcomed the focus on front end costs, but understood why checking consultants were so thorough and said the approvals process should also be investigated.

“There is doubt in my mind that designs are beyond the necessity of what are required, particularly in the current climate,” said Carillion project director Mike Casebourne. “When a consultant is required to perform a full check they are not going to put their reputation and professional indemnity insurance on the line - they will not take it as read, they will check it all.”

Added costs

He added that it was more likely that the approval and acceptance process, with the associated meeting, travelling and overheads that go with it, added to costs.

“A better way would be a form of early contractor involvement contract where all the detailed design is thrashed out in the first stage, and then construction starts,” he said.

Consultants contacted by NCE also said checks were a vital part of the rail design process.

“Checks are in for a good reason – any failure would be catastrophic,” said Atkins rail engineer Andy Robson. “Design checks are constantly reviewed and modified. The amount of checking is based on the complexities.”

Readers' comments (3)

  • So the designers are now to blame for UK infrastructure cost inflation!!! and how much design consultants are charging for their services? less than 5% of the construction value and in some cases they are slashing their costs to barely 3% with vay minimum margins just to stay in business.
    So expect design engineers salaries to slide further down the scale as a consequence of this!!!

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  • Oh dear. I am sure that there are efficiencies to be found in the design phase/process in any sector but in the UK we really do seem to be going down the wrong track here (excuse the pun).

    My direct experience of the US consultancy business, for example, is that the procurement of consultants is purely on quality and not on price at all. This means you get the best brains, often those who inherently understand the infrastructure, working more efficiently therefore, on major public schemes. This doesn't make it any easier to win the work - you just have to be very good at what you do.

    In the UK there is a real danger that cutting fees will translate into cutting corners and don't get me wrong - that doesn't mean that designs will be inherently unsafe, but it means they will be done more quickly, with less time to seek out good value solutions, and whilst properly checked the likely result will be a capital development programme which costs more - chances are a lot more than the savings made in the design phase.

    I know it has been said many times before, but let's try to respect all the talented professionals in our consulting firms (including contractors' design teams), large and small, by showing some level of understanding of the value that they bring to projects and thus the out-turn cost of delivered schemes - I want to see the ICE take a lead on this.

    *Please note that the views above are my personal views as a passionate member of our industry, and are not to be taken as representing the views of any particular company*

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  • I would question the methodology of the report, because I know that Network Rail quite rightly use 'Standard' desgns where possible, and if these are counted, then the design effort per structure must be well below unity.
    Where a 'standard' design is not possible, there is no single "right" solution so it may be possible to get a compliant solution at the first attempt, the second or third itterations may be more economilcal, better and safer to build. Right first time every time is a laudable aim, but if design fees get cut, we will always go for the safe option, not the best one.
    Thorough checking of bridges to be erected in time limited possessins is vital.
    These are my personal views.

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