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Railtrack to tackle zonal 'anarchy'

News

RAILTRACK MAJOR projects and investment director Simon Murray has unveiled plans to establish a procurement stream to reverse growing procurement 'anarchy' across regional zones.

The new procurement line will be based on long-term strategic alliances with a few key suppliers and will standardise contracts and work systems used by Railtrack across the country.

At present, Railtrack's zones operate as autonomous business units and are responsible for making their own procurement decisions. But suppliers have complained that unreliable and autocratic practices by the zones prevent them from investing in training and trying to introduce innovations.

The latest move to address the problem followed a survey carried out last autumn by Railtrack to gauge the attitude of its suppliers. The results, NCE understands, shocked Murray and his management team.

In response, Murray called a meeting last month at which he instructed the heads of Railtrack's nine largest technical consultants to work with him to develop a strategic approach to procurement.

The consultants, who account for more than 50% of Railtrack's workload, include WS Atkins, Scott Wilson, Owen Williams, AEA Technology, CEDG, Mott MacDonald, Gibb and Halcrow. They will meet every two months to develop the strategy. It is also understood that Murray has had high level meetings with the bosses of Railtrack's largest contractors.

New strategic supply manager Ian Todd will act as a single point of contact for the companies involved in the review. Todd will spend the next few months visiting key suppliers.

Railtrack figures show that the network manager uses 800 professional services suppliers. It is hoped the new approach will allow it to get closer to fewer suppliers and help Railtrack and its largest suppliers establish best practices across the network.

A Railtrack spokesman confirmed that the alliancing campaign was designed to tackle problems in the zones. 'We are conducting a review of our supply chains. We have outlined a strategy to spend £120M a year on technical consultants but we don't think we are spending it as efficiently as we could.'

He said that Railtrack was aware of inconsistencies in procurement procedures across the zones. 'That has got to change. Procurement and management has to be consistent.' But he added: 'It is a two-way process. Our key suppliers need to get closer to us.'

However, many doubt Railtrack's ability to change. One leading contractor warned: 'The zones understand competitive tendering. They are good at it. Now someone says alliancing is the way forward. Not many understand alliancing. The heads do but further down they are all buried under production and performance targets.' He added: 'They don't have the time nor the ability to capture it.'

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