Accounts would work something like “project bank accounts” and would ensure suppliers are paid on time
EDF is considering using “client bank accounts” to ensure contractors in the supply chain of its £16bn nuclear power station project at Hinkley Point get paid swiftly.
Speaking to Building this week, Humphrey Cadoux-Hudson, managing director of nuclear new build at EDF Energy, said he was keen to ensure that suppliers on the project had stable cash flows and it was an area the French utility was “working very hard on”.
“We are keen to make sure that the money flows as it should do,” he said.
He added that EDF was considering using “client bank accounts”, which he described as “something like” project bank accounts, as one of a number of “innovative” ways of ensuring suppliers are paid on time.
Project bank accounts work by having a central account from which all suppliers in the supply chain are paid once their invoice is approved.
The mechanism is designed to stop payments being delayed as they flow through the supply chain.
The government, as part of the deal struck with EDF over the project, has claimed that 57% of all the work will go to UK firms. But this week a study by think tank Oxford Economics warned that UK firms should only expect to get 44% of the work.
However, Cadoux-Hudson dismissed the think tank’s study. “I don’t know how they could possibly have come to that number,” he said.
“I know what we’ve done is go through contract by contract.”
He added that EDF had even examined which firms were likely to win contracts in the second and third tiers of the supply chain to arrive at its 57% estimate.
Meanwhile, EDF also announced this week that it is working with the Nuclear Industry Association to establish an SME group, to disseminate information and share expertise to help SMEs win work on nuclear projects.
Vincent De Rivaz, chief executive of EDF Energy, said it would eventually help small firms win business “worldwide”.
Speaking to firms at a supplier engagement day he said: “I’m sure you will agree that there is now in the UK a real sense of momentum [to the Hinkley project].”