黑洞社区

Beth West, commercial director at HS2, has a lot on her mind. The 拢42.6bn high-speed rail link between London, Birmingham, Manchester and Leeds has been the subject of much consternation among the political classes in recent months. Right now, it looks less certain to go ahead than it has done in years.

The most pressing problem this creates for West is that she is trying to grow her own staff, currently numbering 70, to help deliver the project. She says: 鈥淚t鈥檚 hard because people are risk averse by their nature and I think that the noise just doesn鈥檛 help 鈥� One of the big issues is how we will resource that [procurement] team. [It is currently 10 staff] and we鈥檒l probably need to triple that before we let contracts.鈥�

But there are many other items on West鈥檚 to-do list which, even if not as immediately pressing, are just as significant. She has to find ways to get the project鈥檚 costs down; ensure she isn鈥檛 in a race for skilled staff with numerous other big infrastructure projects; and run a smooth and efficient procurement process, and all of this while keeping the politicians happy. All in all, quite a task.

Obstructions on the line?

The lack of unambiguous support for HS2 from Labour has been making the headlines on a near-daily basis in recent weeks.

However, the politics of the project seem unlikely to distract West, given that she started her career as a staff assistant in the House of Representatives in Washington DC. She is originally from Detroit but has lived in the UK for over 10 years and acquired dual citizenship, something reflected in her accent: while still identifiably American, it has been softened by the years in London.

West spent eight years at Transport for London and Tube Lines, working on a variety of projects in a commercial role, and she has also worked in project finance for Credit Suisse and Soci茅t茅 G茅n茅rale. Fresh from another massive infrastructure project, the Thames Tideway Tunnel, she joined HS2 Ltd in October 2012. It is little wonder then that she seems unfazed by the mammoth procurement exercise ahead of her.

And the value of the construction contracts on offer is really mouthwatering: around 拢10.7bn for the first phase from London to Birmingham alone. At HS2鈥檚 first supplier event for contractors interested in the project last month, West said that it would tender up to 20 major packages of work and two design and enabling frameworks for the first phase. She said that most of the consultation packages will be procured through the Early Contractor Involvement model, where a contractor and design team are appointed on a two-stage contract, with a break point between the two stages, first to design and then to deliver it.

Lowest cost in a bid doesn鈥檛 always get you lowest cost at the end of the day. If you don鈥檛 have the technical capability 鈥� you [probably] can鈥檛 deliver what you said you were going to deliver

West is keen for UK firms to benefit from this mega-project when contracts start to be awarded from 2016. As 黑洞社区 revealed earlier this month, 69% of HS2鈥檚 spending so far - 拢171m in total - has been with construction firms, mostly consultants, engineers and project managers at this point. But how will West ensure UK firms get a good shot at winning the new work? 鈥淔or me it鈥檚 about clarity of information, clarity on what is on offer and to keep talking to people so they can put us into their business plans and they are ready to bid,鈥� she says. West points out that under EU procurement rules HS2 Ltd can鈥檛 shunt foreign opposition into the sidings, but says that the procurement will take into account the need to minimise delivery distances to site to help cut the line鈥檚 carbon footprint, which may play to UK firms鈥� advantage. Most importantly, she says that the procurement practice is still at a consultation stage and UK companies have the chance over the coming months to influence how HS2 is procured. Indeed, through this approach she has identified issues she will need to solve, including how firms bidding on the project can protect their intellectual property and how professional indemnity insurance will be provided.

West says HS2 hasn鈥檛 decided on how the elements of bids will be weighted, but she is clear that price will not be the dominant factor.

She says: 鈥淟owest cost in a bid doesn鈥檛 always get you lowest cost at the end of the day. If you don鈥檛 have the technical capability 鈥� you [probably] can鈥檛 deliver what you said you were going to deliver.鈥�

Indeed, she believes that extensive use of BIM will control prices, and she says that she met with architect Frank Gehry, designer of the Guggenheim in Bilbao, to quiz him on that project and he told her that because the BIM design of the project was so advanced all the tender prices were within 1%. She is clearly keen to repeat this scenario on HS2.

The ability to collaborate is also certain to be high on her list of requirements for contractors.

鈥淚鈥檓 slightly obsessed with collaboration,鈥� she says. Unlike some recent big procurement exercises, she is not concerned with encouraging vast amounts of collaboration throughout the supply chain at the bidding stage (something TfL used to knock 拢62m off the cost of the recent Bank station redesign) but she needs firms working on separate packages to work together to deliver the project.

Then there is the small matter of cost. Since the government鈥檚 estimate of the cost was increased by 拢10bn in June this year there has been much public debate on whether the bill can be decreased. Earlier this month, David Cameron ordered incoming chair of HS2 and former Olympic Delivery Authority boss David Higgins to review the costs of the scheme and get them down.

Then earlier this month 黑洞社区 revealed that all phase one鈥檚 engineering design contracts were already overspent. West says this was an unfortunate consequence of widespread public involvement. She says: 鈥淭he responses we have received from the public have had a really big impact on how we spend the money and we鈥檝e had to do a lot of scenario analysis on the feedback we鈥檝e received from community forums 鈥� Sometimes local knowledge is better than what even the world leading consultants have. There鈥� s a lot we have done with things like moving foot bridges and changing alignment in response to what local communities have asked of us.鈥�

She adds that it鈥檚 better to spend cash getting the design right than make adjustments in the delivery phase. In addition, West says that her ambitions for heavy use of off-site manufacturing will reduce costs further and that costs can also be controlled by designing the whole system upfront. She says that in projects like this the civil engineering is usually designed to accommodate a number of possible railway systems, but she says that introduces 鈥渙ver specifying鈥� and extra cost. She would rather the civil engineering was designed for one rail system - but this is yet to be finalised.

Arriving early

Then she goes further saying that the project could even be delivered a couple of years ahead of schedule. 鈥淲hen you bring programmes in a couple of years early you make huge savings,鈥� she says. 鈥淏ut there are some big meaty issues with regards to [the works on] Euston and Old Oak Common stations that have a long duration on site and we need to tackle those in order to hand over the keys early.鈥� She cites the unpredictable risks of construction in London as a key barrier. 鈥淚t鈥檚 so space constrained, even when you dig up a road you don鈥檛 know what you鈥檙e going to find there,鈥� she says.

But West will need to ensure she is able to get enough expertise to deliver this and she is competing with extensive construction programmes from Network Rail, the Highways Agency, National Grid and EDF鈥檚 Hinkley Point C nuclear power plant. She says market capacity is 鈥渁 concern鈥� but is 鈥渕anageable鈥�. 鈥淲e already have good relationships with Network Rail, we鈥檝e been talking about how to bring into the planning process a clear view of each other鈥檚 programmes so we don鈥檛 get into market capacity issues,鈥� she says. 鈥淲e need to be doing the same things with EDF - actually I need to put a call in on that.鈥� She says it鈥檇 be 鈥渇oolish鈥� not to do this and she will look to use Infrastructure UK鈥檚 existing client group as the forum for such sharing.

As the project edges closer to delivery West鈥檚 plans on delivery, procurement, sustainability and market capacity will be tested in the high-profile arena that all public projects occupy. But she appears comfortable and up for the challenge. 鈥淲hat鈥檚 exciting about this point in the programme is you can have a massive impact on how things are delivered,鈥� she says.

Given West鈥檚 pedigree there is good reason to believe her involvement will bring clarity and efficiency to HS2鈥檚 procurement and delivery - presuming, that is, the project goes ahead.