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.”
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.”