NETWORK RAIL was this week debating how to give renewals contractors the option of sourcing labour and plant through its framework suppliers in a bid to drive down costs.
Such a move would help the track operator build on buying gains of up to 30% through framework deals with suppliers following its decision to bring track maintenance in-house.
Network Rail's maintenance division is making substantial savings in areas like plant hire and agency labour because it can buy nationally from fewer suppliers under long term framework agreements.
'We have started discussions with our renewals contractors (about using Network Rail framework suppliers) and we are trying to get a better understanding of the benefits on a case by case basis, ' said Network Rail director of major projects and investment Simon Kirby.
'There are differences between renewals and maintenance. Type of contract will be a factor.
'If it's a firm price then the contractor could opt to use our framework supplier. If it's cost reimbursable then we'd expect them to as the cost comes straight back to us.' In the year since Network Rail took direct control of maintenance it has slashed almost 12% off its total maintenance costs.
Total savings amount to £130M from an original budget of £1.1bn. Savings on profit no longer being paid to its former infrastructure maintenance contractors add up to £50M.
But another £70M saving has emerged because the rail operator has found it can manage the work more efficiently.
'We've made a tremendous improvement by cutting different commercial deals, for example, ' said maintenance director Richard Fenney.
'We found a lot of things being bought for the railway were going through two or three tiers of a supply chain.
We have been able to strip that out and find out what the cost is at the factory gate.' Jackie Whitelaw