HS2 supply chain firms get a taste of available contracts

Tunnelling and surface route contracts, worth a total of £6.8 billion are among the highlights of the potential business that could be won by companies across the UK, it emerged at an HS2 supply chain conference, on October 17.

The first major civil engineering contracts for the £42bn project will be placed towards the end of 2015, although the delivery of the construction of tunnels, surface route and stations is not set to happen before the end of 2017. The potential value of some contracts, such as the redevelopment of Euston station (primarily a Network Rail scheme) and rolling stock, has yet to be mooted for a number of reasons, not least the complexity and some uncertainties.

The procurement of railway systems and rolling stock contracts will begin in 2015, with delivery beginning early in 2019.

Ahead of an announcement
on October 27, which will confirm the plan of route for Phase 2,
it also emerged that HS2 would create at least 2,000 apprenticeships, and a boost of 10,000 jobs in the rail workforce, which will be needed to modernise the UK rail network.

“This is different to rebuilding Victorian railways. We need innovation,” HS2 Chief Executive Simon Kirby told the conference.

When asked whether HS2 Ltd would give priority to British firms, Kirby said that HS2 “needs to be like Crossrail” - a project for which 95% of contracts have gone to British firms. Given the relative lack of experience in building completely new railways in the UK, the aim is for around 60% of contract opportunities arising in the supply chain to be awarded to small and medium-sized enterprises.

With the parliamentary process ongoing - Phase 1 is currently being scrutinised by a select committee - HS2 can only procure a limited amount of work before the end of 2015, with a relatively small part of the package being the design and services work, at £0.4bn.

HS2 Ltd has already embarked upon a national market engagement exercise, with “hundreds of businesses” helping to shape the initiative. Companies that win HS2 contracts will be expected to use open procurement tools, while the process will be made easier for small and medium enterprises with barriers removed. “The project will demand new ways of working. This is why we’re consulting closely with you,” said Kirby.

“We want to ensure that the best companies can identify and compete for contract opportunities,” said HS2 Chairman Sir David Higgins in a message to potential suppliers inviting companies to start preparing straight away. “We want you to get on board and play a part in delivering this nationally important project. HS2 matters to our industry and our country”.

  • This news story was published in RAIL 760 on 29 October 2014

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