ECIs 23rd Annual Conference 2012 The European Construction Industry

- Facing the Global Challenges

26 & 27 April 2012 Hilton Hotel, Dusseldorf

Collaborative Delivery of Rail Projects

Simon Kirby, Managing Director, Infrastructure Projects
27th April 2012

Contents
Introduction to Network Rail A fundamentally different company in 2012 Devolution Projects Business National Centre Collaborative working

Network Rail
Neill Carruthers

This is a growth industry

Total annual journeys 1928 2010*, billions
1.4 1.3 1.2 1.0 0.8 0.7 0.6 0.4

*Date only available at five yearly periods prior to WW2

We are bringing costs down whilst dealing with record numbers of passengers
Controllable OM&R costs vs passenger journeys
8,500 Costs Passenger Journeys 8,000 7,500

6,500 6,000 5,500 5,000 4,500 4,000

Source: ORR, National Rail Trends, 2011; and Network Rail, 2011

Costs m

Journeys

7,000

CP4 - Schedule performance is on plan

550 500

450

400

350

300

250

200

Prior Pds Jan 09 Sep-11

Current Pd Q4 Q2 2012 310 304 2011/12

Q1

Q2

Q3 2012/13

Q4

Q1

Q2

Q3 2013/14

Q4

Future Years CP5 543 543

---------------------------------------------342 338 364 363 381 379

FORECAST TO GO (CP4) 407 403 419 417

---------------------------------------------------430 423 452 436 478 481 496 498

Cum Act/F.c Cum Baseline

265 242

A fundamentally different company in 2012

A fundamentally different company in 2012

Devolved route business units aligned with our customers National Centre A separate projects business working in collaboration with our supply chain

Devolution - Getting closer to customers

Increase our responsiveness Reduce industry costs Offer a seamless service from routes, with support from the centre Maintain network benefits Network Operations is now live

Train image

National Centre - Milton Keynes

A separate projects business working in collaboration with our supply chain

Network Rail Infrastructure Projects

Delivery business for Network Rails capital project delivery 3.5b Turnover per annum 4000 live projects Works in close collaboration with its suppliers

Infrastructure Projects went live April 16th

SCO NE EGIP

Anglia Kent Sussex Wessex Platform Ext

LNW East Mid BGP Kings Cross

Crossrail Reading Western Wales Electrification

Collaborative working in Infrastructure Projects

Partnership Strategy

16

Partnering Strategy - Objective

The objective of the Partnering Strategy is to drive down unit cost by: improving safer construction performance through aligned risk management and integration introducing innovative solutions upstream reduce scope variations by aligning client, constructor and designer earlier in the process reducing duplication in resources

7 Supplier Engagement models

DBOM Limited Partnership Outsourcing

Traditional
Supplier Engagement Models

Limited Partnership

Engaging

Alliance

Delivery Partner

Successful Collaboration requires

Executive commitment Long term partnering ethos Structure and discipline Appetite for innovation Openness Mutually agreed objectives

Collaboration Key Process Ingredients

Forms of contract Early supplier engagement Cost benchmarking Risk management Relationship Management

Clarity of strategy is vital

Corporate Relationship Management Plan clearly sets out: Collaborative Working policy statement Overarching description of how NR will work collaboratively Defines what will be done at corporate and project levels

Collaborative Relationship Management

22

The Worlds First National Standard for Collaborative Relationship Management

Implementation Considerations
Collaborative Working can take different forms, aligned to the Models of Engagement Alliancing currently represents the most advanced of these Also works effectively on fixed price & target cost contracts Contracts are to be designated as Collaborative Working at procurement strategy stage

Aligned objectives drive innovation

Westbury Lane

Next Steps
Projects now being identified for potential expansion of BS11000 portfolio, to include: London Bridge Area Partnering Programme Crossrail/Reading Stafford Area Improvement Project Other ECML and Signalling schemes The addition of these schemes will take the value of projects working under BS11000 to nearly 3bn NR Collaborative training programme now developed Engagement with other parts of the business to establish potential application

European Construction Institute www.europeanconstruction.eu