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Rising costs… and how to gain control

Few consultants have been able to afford proper training schemes, and many are reliant on a few ageing seasoned engineers (the ones put in front of clients to win work) and a bunch of computer jockeys who feed numbers into apparently sophisticated programs. Those numbers will be very risk-averse, given the liabilities that the client is seeking to offload to the designers and the attitude of their owners and insurers.

This is also compounded by the fashion for clients to let design and construct packages to contractors who (of course) choose the consultant who will be cheapest and least demanding. The consultant’s duty is to the contractor, not the client, and anyone who believes otherwise is not living in the real world.

Then there is the more recent current pressure of cost inflation from competing opportunities for the civil and building supply chain, from major projects such as highways or HS2 through to the explosion in domestic building works funded by lockdown cash.

It may be that the current shortages in building materials will be short-lived. But with clients reporting real upwards cost pressures from the supply industry overheating, compounded by the loss of some European skilled staff, the next few years look challenging.

Initiatives such as Project SPEED are rightly welcomed. They are essential and need every support to be driven through. However, at the same time we must recognise that they will counter some of the current upwards pressures (good), but not be anything like sufficient.

This is a world where we should aim for the cost of projects to be halved - or more. A reorganised industry has to deliver projects that sustain and develop its infrastructure at a price that the country recognises as value for money. And reorganisation, real or just anticipated, has a long history of distracting managers from the work in hand.

Fundamental improvement can only come from the client - how it discharges its sponsorship responsibilities, and how it project manages delivery.

However much a client outsources work, or keeps it in-house, the two vital competencies it needs to retain are the ability to know what a sound solution would need to be to achieve any desired outcome, and to know the  ‘should be’  cost of the work involved.

Then there is a third, which is to be able to assure the end result. Leaving it to ‘self-assurance’ by the designer/contractor is to outsource responsibility, however wonderful and aligned any particular contracting partner might seek to be. This is rather more than gathering paperwork with nicely scribed signatures.

Benchmarking can be a powerful tool in establishing  ‘should be’ cost and time. But benchmarking between projects in the same environment is a misleading nonsense - comparing sick animals with each other, not with healthy ones, proving that one is averagely sick and that’s OK?

There is some scope for looking across sectors, such as into highways and utilities projects, and the applicability of identified better practice should be straightforward in similar legal and regulatory environments. But this only takes things so far.

Benchmarking with European railways and infrastructure industries is more challenging because the environments will be different. But it is potentially a most rewarding activity, especially when gradual incremental improvement is simply not enough. The art and science is to recognise the differences and draw out the similarities, and most of all to see better practice for what it is.

Strangely, the laws of physics are similar, and any suggestion that others have a fundamentally worse safety culture is black propaganda. Too often, more effort has been expended in either emphasising differences or pleading special mitigation.

A rule of thumb is that if there appears to be a 10% or 20% difference, then such arguments are possible… but not 50%+. So, track renewal or electrification installation costing over twice as much as in notoriously low-cost countries such as Germany and Switzerland shows something is fundamentally adrift.

Let’s consider what we learn from raising our eyes beyond little Britain - starting from the ground up and ending in the Boardroom.

Firstly, the raw cost of labour and materials is not greatly different, and the legal framework of regulation as well as personal professional liability can be more (not less) challenging in other countries. But after that, we start to diverge.

Railway on-track plant can be more expensive, given some uniquely British requirements and interpretation of legislation - especially around such detailed areas as hydraulic electric connectors.

But the overall impact is often overstated. The size of the British market and steady modularisation of equipment design over the past two decades has significantly overcome this factor. Individual component supply chains are international, as is off-track plant manufacture.

The first major divergence comes in railway construction competence. Ask to see the certification of any person on a railway site and expect a sheaf of personal safety stuff (albeit electronically saved), either on track safety rules or small machine operations - certainly necessary, except probably erring too much to the tick box mentality of corporate liability assurance.

However, there may well be next to nothing on competence to undertake the physical work effectively to the required quality. This is important. Benchmarked practice seen across the Channel is of a workforce that is salaried (whoever it works for), full-time, and properly trained in both the tasks to be carried out and (vitally) each individual’s role in the overall work process. Expect an atmosphere of calm ordered teamwork with little need for frequent shouted instruction.

Behind this will be artisan technical training (not just classroom multiple choice gloss), so that each member of the team understands the underpinning reason for what they are doing and the importance of doing it to standard. They will be technically certified by experienced and accountable supervisors.

Our military manages this, and quite a few railway managers are reservists, so understanding what needs to change shouldn’t be too difficult.

When challenged that all this costs money, the answer is that people doing things with personal pride, safely and to the right quality first time, is a far better way to achieve time cost and quality than an army of paper warriors - and the level of real-time supervision and assurance needed is minimal.

It is this approach which enables our neighbours to use around a third of the number of people to carry out routine infrastructure tasks such as switches and crossings renewal.