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Network Rail still to award £7bn of CP7 work

Major contracts remain to be confirmed for 2024 to 2029 period
By Rob Hakimian

Network Rail still has £7bn of infrastructure contracts to award for its Control Period 7 (CP7) spending programme, which runs from 1 April 2024 to 31 March 2029.

Control Periods are five-year timespans for which Network Rail is granted funding from central government to carry out specified works and renewals programmes.

CP7 starts in 10 months but considerable packages of work have yet to be awarded

In December it was announced that Network Rail would receive £27.5bn from central government for CP7 and would be expected to spend £16.5bn of its own income making a total of £44bn investment in the continued management of the railways over the next five years.

Network Rail procures its work through its five regions: Eastern; North West and Central; Southern; Scotland; and Wales and Western. Two of these regions have completed the procurement of their main frameworks for CP7.

In the Southern region, four partners have been selected for the Southern Integrated Delivery (SID) alliance, which will cover CP7 and CP8 which runs from 2029 to 2034. This could be worth up to £9bn. The appointed contractors are VolkerFitzpatrick for buildings and civils, Atkins for signalling, VolkerRail for track and Octavius Infrastructure for electrification in plant. The SID is being touted as the first enterprise model in the rail sector.

The Southern Region is procuring a minor works buildings and civils framework worth up to £1.7bn and which will also run through CP7 and CP8.

The Wales and Western region has appointed contractors to its £2bn construction framework for CP7. AmcoGiffen was appointed to two lots: electrification and plant in Wales and Western and structures for Wales and Borders. Morgan Sindall will look after structures in the Western section. Octavius Infrastructure will be in charge of the renewal of buildings, depots and more across the region. Geotechnical and offtrack drainage work will be split, with Bam Nuttall working on Wales and Borders and Taylor Woodrow (Vinci) appointed for the Western section.

Wales and Western has not finished procurement yet. It is also looking to hire a development partner for CP7 in a contract that could be worth up to £25M if extended to eight years.

Frameworks in other regions are less advanced in terms of procurement.

The North West and Central region has split its capital delivery works into categories A to D. Category A is a £490M large works framework; B is a £695M medium projects framework; C is £358M of work for small to medium projects; and D is a £229M a minor works and reactive response service framework. Contract awards for categories B to D are expected in the autumn. Tendering for Category A is expected to open shortly, with a contract award expected in early 2024.

CP7 procurement in the Eastern region had a false start after the process of establishing a £4bn renewals and minor enhancements framework began last April, but was then cancelled. It launched the tender process for its £3.5bn Eastern Routes Partnership framework in April. Network Rail is briefing interested contractors and the deadline for expressions of interest is 2 June. It is expected that invitations to tender will be sent at the end of July.

In Scotland, procurement has not formally commenced. There was a supplier engagement event for renewals and enhancements in September and another for signalling, power and communications in January, but there has been no update since then.

This leaves £6.97bn of contracts yet to be awarded in the four regions in England and Wales, plus more work to be procured for Scotland’s Railway, before CP7 starts next April.

Despite the healthy appearance of Network Rails CP7 procurement status, there are concerns about its financial stability. Recently published board minutes from January revealed that Network Rail’s revenue was £850M less than it expected to earn in the last financial year. This news coincided with the leak of an official Network Rail presentation that said it would not have enough maintenance funds for the next five years.

These concerns have led to a 4% reduction in renewals for the remainder of CP6. The rail operator remains positive, saying it will still deliver £4bn of renewals this year. It is also prioritising its work banks accordingly, based on safety, performance and value for money.