Alstom, the global leader in transport infrastructure, power generation and transmission, has formed the joint venture ABC Electrification Ltd (ABC) with Babcock and Costain. All three companies are equal partners.
ABC is one of four suppliers appointed by Network Rail (NR) to deliver a £2 billion electrification programme - electrifying more than 2,000 miles of Britain’s railways over the next seven years.
Two years ago, when ABC was set up, Alstom UK President Terence Watson said: “Being selected as one of the framework suppliers working with Network Rail is a really important win for ABC and for Alstom. The project is an opportunity to invest in training and development and attract newcomers to the sector.”
He added: “The delivery of this major programme of electrification is an essential part of the UK’s rail network and vital for the continuing growth of the UK economy. Working in collaboration with NR means that we can invest in sustainable local supply chains and develop Britain’s rail industry as a strategic sector.”
It is ABC Electrification’s task to support Network Rail in meeting these challenges. It combines design, engineering and delivery expertise across all electrification activities, giving it total capability and the trust to deliver the most complex and demanding schemes.
“When we set up ABC, our approach to the UK market was to find the right partnerships, with a core focus on the engineering products as well as project delivery - and we’ve done that,” says Alstom Infrastructure Business Managing Director Jonathan Willcock.
Alstom, Babcock and Costain are shareholders in the company responsible for the West Coast Power Supply Upgrade, Walsall-Rugeley electrification, and the London Overground capacity improvement.
A number of projects are at what ABC calls the Early Contracts Involvement (ECI)phase, during which ABC agrees a target price with Network Rail before later submission to the Enhanced Cost Adjustment Mechanism (ECAM) process - ECAM is administered by the Office of Rail and Road, acting in its role as the regulator, to ensure that public money is being spent effectively.
“The ECAM process means it’s in everyone’s interests to prove we’re providing value for money,” explains Willcock.
Project teams are based in what Willcock calls ‘integrated co-located offices’ in Newport (for Wales) and Rugby (for Central). There is also a base in Edinburgh for the Edinburgh-Glasgow Improvement Programme work (EGIP), where ABC is involved through a partnership with Morgan Sindall.
“It’s only Scotland where it’s slightly different,” says Willcock.
Alstom is the second biggest electrification provider worldwide in terms of market share. Its Alstom Lecco operation in Italy means it can draw on best practice from around the world.
“We bring a fair bit of innovation with the wiring train which arrives later this year,” says Willcock. “It fits well with what Babcock brings - boots on ballast and plant.”
Value for money is demonstrated in how ABC differentiates itself from other contractors.
“We work collaboratively in the ECI phase. We submitted a number of rates. We have total transparency on our costs.”
ABC’s contract is estimated to be worth £900 million over an initial seven-year term, with an option to extend for a further three years.
Structurally, ABC is an incorporated equal share joint venture. It has been awarded two out of the six areas within the programme - London North Western and the Wales and West region (including the Valley Lines).
ABC, whose chief executive is Alan Kay, is also providing High Output Plants and Piling Trains, and is looking at doing much of its engineering in house.
“We’ve pulled upon engineering resource, not just in Alstom, but also Babcock,” says Willcock, adding: “The fact that we’re engineering-led differentiates us from others in the market.”
Day-to-day, Willcock says that working with NR is very much an integrated effort: “NR plays a key role, but we rely on each other to deliver. The synergy with NR and ABC is vitally important. NR has to be part of the solution.”
In the Central Region, for example, ABC branded the integral delivery there the Central Power Electrification Team (CPET). And staff in CPET work as one team, viewing themselves as working for CPET alongside Network Rail.
Although corporately individual staff members work for ABC and come from any of Alstom, Babcock or Costain as ‘secondees’, their identity is absolutely to the small teams.
“You still have to administer the contract,” says Willcock.
“The timescales are long-term. A lot of money has been invested in setting ABC up - a five to seven-year timeframe looks set to be extended further. We will invest a lot of money in it while there is a work bank to go at.”
Willcock looks back at the business plan from two years ago, and concludes: “We are not too far off what we thought we’d be.”
- This feature was published in RAIL 775 on May 27 2015