£7bn of contracts still to be awarded for Network Rail’s CP7

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Control Periods are five-year timespans for which Network Rail is granted a significant sum from central government to carry out a specified programme of works and renewals. In December it was announced that it would receive £27.5bn funding from central government for CP7 and would be expected to contribute £16.5bn from its own income, totalling £44bn for the continued management of the railways over the next five years.

Network Rail divides the country into five regions which are each procured separately and via a different system. The regions are Eastern, North West and Central, Southern, Scotland and Wales and Western.

Two of these regions have completed the procurement of their main frameworks for CP7.

In the Southern region, four partners have been selected for the Southern Integrated Delivery (SID) alliance, which will last for not only CP7 but also through CP8 (2029 to 2034) and could be worth up to £9bn. The appointed contractors are VolkerRail for buildings and civils, Atkins for signalling, VolkerRail for track and Octavius Infrastructure for electrification in plant. The SID is being touted as the first enterprise model in the rail sector.

The Southern Region is also looking to procure for a minor works buildings and civils framework that is worth up to £1.7bn and will run through CP7 and CP8. The deadline has passed for requests to participate, with invitations to tender expected to go out in the summer.

Elsewhere, in the Wales and Western region, contractors have been appointed to the construction framework for CP7, which is worth £2bn. AmcoGiffen was appointed to two lots; the electrification and plant in Wales and Western and structures for Wales and Borders. Morgan Sindall will look after structures in the Western section. Octavius Infrastructure will be in charge of the renewal of buildings, depots and more across the region. The geotechnical and off-track drainage work will be split, with Bam Nuttall working on Wales and Borders while Taylor Woodrow (Vinci) manages them for the Western section.

Wales and Western has not finished procurement yet, though. It is also looking to hire a development partner for CP7 in a contract that could be worth up to £25M if extended to eight years. It is focusing on a partner who will “embrace supply chain innovation and technology and support the Intelligent Client model by reducing duplication of resource”.

In the other regions, frameworks are at various stages of procurement.

The North West and Central region has divided its capital delivery works into categories A to D. Category A is a £490M framework for large works, B is a £695M framework for medium projects, C is £358M and for small to medium projects and D is a £229M framework for minor works and reactive response service. Categories B to D are currently in live procurement, with contract awards expected in the autumn. Category A has only had a PIN issued, but the opportunity is expected to be opened very shortly, with a contract award expected in early 2024.

The Eastern region had a false start in its procurement for CP7, having started the process of establishing a £4bn renewals and minor enhancements framework last April, only to then cancel it. It has in the last few weeks launched the tender process for its Eastern Routes Partnership framework, worth £3.5bn. Network Rail is currently engaging in briefings for interested contractors and the deadline for expressions of interest is 2 June. It is expected that invitations to tender will be sent at the end of July.

In Scotland, procurement has not formally commenced. There was a supplier engagement event for renewals and enhancements in September and another for signalling, power and communications in January, but there has been no update since then.

This leaves £6.97bn of contracts yet to be awarded in the four regions in England and Wales, plus more as-yet-unknown contracts to be procured for Scotland’s Railway, before CP7 starts next April.

Despite the healthy appearance of the procurement status of Network Rail’s CP7 contracts, there are concerns about its financial stability. Recently surfaced board minutes have revealed that Network Rail made £850M less than it expected in the last financial year. This has also coincided with the leak of an official Network Rail presentation that said it would not have the funds to maintain the nation’s railways for the next five years.

These concerns have led to a 4% reduction in renewals for the remainder of CP6. The rail operator remains positive, saying it will still be delivering £4bn of renewals this year and, going forward, it is prioritising its work banks accordingly, based around safety, performance and value for money.

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