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North East regional report: Spending power

Collaboration, programme management and a responsive supply chain will be key to delivering a multi-strand programme of works in the North East. This is the first in a series of spotlights on regional workload. Alexandra Wynne reports.

There is currently no consistent view of what good looks like across the supply chain.” That was the opening statement from Civil Engineering Contractors Association (Ceca) chief executive Alasdair Reisner at a recent North East event.

The sentiment is something that Ceca is tackling head on alongside NCE and training body CITB via the recently launched Infrastructure Leadership Programme (NCE 18 December 2014).

The programme has been set up in recognition of the crucial role that supply chain members will play in upgrading and maintaining the UK’s transport and utilities networks.

Millennium Bridge Newcastle

North East: Local authorities are clubbing together to pool infrastructure budgets

It will provide a single clear view of the key capabilities that will be required, based on research carried out with major clients and main contractors. This will then be used as the basis of a programme of low and no-cost training to be provided at a regional level for supply chain firms from this summer.
At the heart of the programme is a series of eight regional events to allow supply chain companies to hear more about the programme, and to contribute views about the types of support they would like to receive.

The North East event, the programme’s first, shone a light not only on some of the challenges already out there but also the scale of work available.

spending table

To see a larger version of this image click here

Transport was at the top of the agenda. The total cost of the upcoming transport programme is worth £220M, which includes local contributions and £147M secured by the North East Local Enterprise Partnership (LEP) from central government. National roads spend announced in the Autumn Statement will be additional to this so the work is there.

This translates as 16 transport schemes set to start construction in 2015/16 with a further eight provisionally scheduled to follow on in 2016/17.

The LEP will act as programme manager for the schemes and co-ordinate between the Department for Transport and the scheme promoters, which will be the individual local authorities.

One of the challenges the programme faces from the delivery side will be trying to see whether some of the individual schemes can be joined up and how they might be delivered to create the most competitive procurement for the schemes, according to Mark Wilson, transport advisor for the North East Combined Authority. This combines the seven councils which serve County Durham, Gateshead, Newcastle, NorthTyneside, Northumberland, South Tyneside and Sunderland.

This is particularly tricky because pretty much all the promoters have existing partnerships whether for developing a business case or for design.

“We’ve had to move quite quickly and to an extent we’ve worked with what we’ve had but now is the time to review how we can deliver this programme,” says Wilson.

Over at Northumbrian Water, changes are also afoot with regard to the way the client hopes to work with its supply chain in future, according to head of procurement and supply chain Steve Crake.

The firm is aware of its modest size compared with the bigger utilities, but it is still keen to embrace a modern, collaborative style of working.

“Our programme is one of the smallest. Scale is critical,” says Crake. “We’re not a Thames Water. The firm’s annual programme is around £200M, a quarter of, say, Thames Water’s.”

The introduction of a new leadership team means that the water company is willing to change into an alliancing relationship with its supply chain to deliver its three runways of work (see table).

Port of Tyne

Port of Tyne: Profits ploughed back into investment

Over at Tyne and Wear Metro, the difficulty for promoter Nexus Rail has in the past been a lack of cash.

“A metro system takes a lot of maintenance,” says Wilson “In 2010 it suffered from a chronic lack of investment. We haven’t got the money to do everything we want to do. So our strategy is to secure long term funding beyond our current 11 year plan.”

Nexus is investing £389M in new track and technology, better stations and refurbished trains right across the system.

North east transport schemes

To see a larger version of this image click here

There is also a £7.88M Central station refurbishment in the process of prequalification with a construction start due in October.

A maintenance and renewal programme has been underway from 2010 and will continue until 2021. Beyond 2021 the hope is to move to a longer concession than the current nine year one. Another key contributor to infrastructure work that it is hoped will create jobs and growth in the region is the self-funding Port of Tyne. All profits made by the port go back into developing it. It has no shareholders and no local authority involvement which gives its programme an independence not afforded some of the other significant schemes.

It has evolved from a port that primarily thrived around the 1960s as an exporter of coal, to one that is now a major importer of cars from Nissan and Volkswagen.

It has the land to develop on and hopes to exploit potential growth from the energy sector, not least because of the need for biomass and offshore wind development.

A major effort will now be needed, led by the clients and embraced by the supply chain, to skill up and adopt working practices to ensure a fair crack of the whip that will generate the bold ambitions the region has to create a sustainable economy.

  • Two more regional events are set for the East of England (3 February) and the North West (5 February). To register your attendance at these or future events contact Ceca chief executive Alasdair Reisner on 020 7340 0454 or email alasdairreisner@ceca.co.uk

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