21 December
2010 | Lindsay Clark
The Treasury believes it can save around £3 billion on infrastructure
investment – and improving procurement processes is part of the answer.
A report by Infrastructure UK (IUK) sets out a blueprint to save money on the National Infrastructure Plan 2010 – a
£200 billion, five-year investment programme.
The report,
based on a survey with industry leaders, outlines how costs of building and
maintaining energy, transport, waste and flood defence infrastructure projects
can be reduced by at least 15 per cent. With between £15 and £20 billion being
spent each year, this equates to savings of between £2-3 billion a year.
Terry Hill, chairman of the InvestigationSteering Group, a member of IUK’s Advisory Council and
leader of Arup’s Global Transport market, said: “Evidence from the
investigation suggests a high degree of consensus that efficiency improvements
can be achieved, and that the infrastructure construction industry will respond
positively to client-side improvements in planning, commissioning and
procurement of projects and programmes. Clients will respond in turn to
improvements in the industry by becoming more efficient and transparent.”
The survey
ranked “client leadership, poor design/specification and overly complicated procurement practice”as
the top three most significant areas for reducing costs.
It found
that the UK’s interpretation and use of competition
processes, particularly in the public sector, is not always effective in
producing lowest outturn costs.
Public
sector clients are more risk averse to the cost and time implications of
potential challenges, and processes are overly complex and too much of a
“box-ticking” exercise, the report said.
It also
found ways of making savings. Comparisons of early contractor involvement on
Highways Agency projects demonstrate lower prices and up to 50 per cent shorter
construction times. However, competition law and interpretation of procurement
rules can inhibit the effective use of early contractor involvement, it said.
The need for
integration of the whole supply chain was a common theme among those
interviewed.
