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Government says industry on track to cut cost of delivering infrastructure

The construction industry is on track to deliver cost savings demanded by government, according to the first annual report of Infrastructure UK’s three year cost review programme.

The Infrastructure Cost Review, launched in March last year, set out plans to reduce the cost of delivering infrastructure in the UK by £2bn to £3bn a year by 2015. Today’s report says that the programme is on track to deliver these savings, with the first annual report having already identified projected savings of up to £1.5bn through changed behaviours and practice.

Examples of savings cited include a projected 20% saving of over £600M on the 20 major projects being delivered by the Highways Agency and a £400M saving by London Underground.

These savings have come, in part, from a new agreement between the Highways Agency, Environment Agency, London Underground and Network Rail to pool data and access commercial intelligence.

“This first annual report shows we are on track to deliver the savings we identified last year,” said Treasury minister Lord Sassoon. “What is particularly encouraging is that these savings are being delivered through close and fruitful co-operation between the public and private sectors.”

Key achievements

Other key achievements highlighted in the annual progress report include:

  • Government and industry agreement to the Infrastructure Charter as a basis for setting out the behaviours required to improve collaboration and reduce costs
  • Development of a ‘routemap’ to enable public and private clients to select the most appropriate procurement strategy and drive consistent behaviours and practice for across infrastructure programmes or projects
  • Application of new approaches to the management of risk and contingency in public sector infrastructure projects
  • Formation of an Industry Standards Group to remove duplication and redundancy in technical standards for infrastructure assets
  • Commitment to address the problems of cyclicality in the water sector as part of a joint study with regulator Ofwat
  • Partnerships with industry to improve supply chain skills and capability and access cross sector efficiencies – starting with pilot programmes for tunnelling across rail, waste water and energy projects

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