Government drive for more efficient procurement failing to reach energy and waste sector clients

Paul Deighton

Procurement practices in the energy and waste sectors are lagging behind the best practice in sectors such as water and rail in the drive to save costs, a major government survey of the construction industry has found.

The survey of construction bosses found that the certainty and transparency of the waste, energy and communications sector pipelines of work was worse than other areas of infrastructure.

The survey found 73% of respondents felt the rail sector had made improvements in these areas, but 85% of respondents still said that clients across all infrastructure sectors were favoring lowest cost bids.

The survey formed part of the government’s annual report into its progress towards reducing the cost of infrastructure work by 15% by 2015, a goal set out in its Infrastructure Cost Review in 2010.

Commercial secretary to the Treasury Lord Deighton said work to date had shown there were still big cost savings to be made.

He said: “It is vital that government and industry continue to work together to ensure a lasting legacy from this programme, to continue to bear down on the cost of building the infrastructure vital to sustained UK growth. I want to ensure that going forward we have much better visibility of the performance of these projects and a means to continually measure and monitor performance.”

The report highlighted successes in several major projects. It said High Speed 2 had already identified £1bn of potential savings and efficiency drives on £1.2bn of projects in the Highways and Environment Agencies had delivered 25% savings.

The government is to create a Major Infrastructure Tracking body within Infrastructure UK to monitor major infrastructure projects and help create better visibility of best practice and the construction pipeline.

Nick Baveystock, director general of the Institution of Civil Engineers, said the results so far were “very encouraging”.

He added: “The creation of a Major Infrastructure Tracking team is also welcome news and could increase supply chain confidence and encourage investment in skills and capabilities.”

Key cost review priorities for 2013-14

  • Infrastructure pipeline visibility and performance –A new Major Infrastructure Tracking (MIT) team will be established within Infrastructure UK to improve the government’s capability to monitor and track performance of critical infrastructure projects. Better visibility will be used to improve delivery.
  • Applying the Infrastructure Routemap – Following the successful launch and piloting of the Infrastructure Routemap in January 2013 Infrastructure UK has established a joint steering group with industry, to oversee further development and application of the Routemap and its supporting tools.
  • Infrastructure Client Working Group programme – The group will further work to improve governance, build better collaborative relationships, learn from successful alliancing programmes and establish best practice for client and supplier performance management.
  • Infrastructure data and benchmarking – The Major Infrastructure Tracking (MIT) team in Infrastructure UK will improve the capture and sharing of infrastructure pipeline and performance data as well as industry and project level benchmarking.

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