Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence

Memorandum by RITC Ltd (RI 08)

  An item in Construction News on 1 June 2000 asked for contractors to "blow the whistle" on Railtrack's performance in maintaining and renewing the country's rail network. Whilst I would be surprised that contractor's responded to such a request as Railtrack is their main client, RITC would like to respond. Our response focuses on the impact the current method of contracting has on the performance of the whole industry, especially in relation to the lack of skilled engineers in the industry (and nationally) and the lower levels of training being undertaken since privatisation.

  Contracting as it is carried out within the rail industry requires the involvement of more engineers in the formulation of tenders and in the tendering process. The requirements of tenders are becoming greater and usually there are several contractors bidding for projects, which mean that the majority of the work undertaken is abortive.

  The management of the contracts is becoming more onerous with greater requirements for documentation.

  The nature of contracting as it is carried out requires the involvement of more engineers in the management of the work than previously required by the integrated rail industry. Railtrack employ engineers who project manage Contractors who employ engineers to carry out some of the work and project manage subcontractors who carry out most of the work. All this layering makes communication, planning and approval processes more complex and necessitates the use of many more engineers checking each other at a time when there is a national shortage of engineers of all disciplines.

  Railtrack have recognised this problem on some contracts such as West Coast Mainline where there is an integration of the Project Team and alliances have been formed, but this needs to become more widespread. This reduces rather than removes the problem.

  An additional problem is that most contracts are let as short-term contracts rarely lasting more than two or three years. Therefore contractors are unable to predict their future workload or type of work or resources required (especially engineers). All this makes it more risky for Contractors to commit to the investment in recruitment and training as it must be done as an act of faith. Railtrack have in the past reduced some areas of investment and cancelled projects, which has made contractors more wary of committing to long term plans for training and development. Overlaid with the national shortage of engineers across all industries, and a sudden upturn in proposed investment in the rail infrastructure has resulted in skills shortages in the industry. Again this has begun to be addressed and next generation contracts should be of longer duration.

  In view of the way the work has fluctuated over recent years contractors resources have been cut to a minimum in times of dearth. It is impossible for contractors to match increased resources at the speed of Railtrack's demand. Over the next few years Railtrack's increased investment programme includes such major projects as West Coast Mainline, Channel Tunnel Rail Link, East Coast Main Line, Projects on Great Western routes plus the usual track and signal renewals. Skilled people are already in short supply—engineers, site supervisors, designers etc.

  The industry needs to find ways of making best use of the available skilled workforce and rapidly improve the skills of others working in the sector.

  There is also a problem in that most work is required to be carried out at key periods ie weekends when track possessions are available. Manpower requirements for these periods are well in excess of those required during the normal working week, therefore contractors are forced to rely on labour suppliers and retain a core workforce only. Due to the fluctuating workloads the demand for this additional labour is inconsistent so that labour suppliers investment in training their staff is commercially risky. This is compounded by the itinerant nature of the workforce.

  Another impact of privatisation has been to introduce competition where it is of least value—the training and development of the sector workforce.

  It is generally believed that all of the above issues add to the cost of the work being undertaken and do not add value. However, more concerning is that they are adding to the shortage of skilled labour at a time when Railtrack are looking to expand its investment programme. Unless these issues are resolved Railtrack will be impeded in delivering the infrastructure improvements that the rail industry needs.

  Railtrack has taken a number of actions to improve the processes and is clearly intent on further improvement, but it is also generally felt that more could be done and good practice could be more widespread.

June 2000

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