Construction body welcomes Network Rail’s contract changes

The decision by Network Rail to mandate 28-day payments to its supply chain and the introduction of Project Bank Accounts (PBAs) have been welcomed by the Specialist Engineering Contractors’ Group (SEC Group).

The trade body said it was “encouraging” to see Network Rail take the next steps in banning retentions and developing a closer and more collaborative relationship with its suppliers and sub-contractors.

SEC Group revealed its hope that Network Rail’s monitoring process will ensure such policies are trickling down their sub-contractors in all tiers and implemented vigorously.

SEC Group CEO Professor Rudi Klein said: “It is great to see large and influential public sector clients like Network Rail supporting best practice. We hope that others will follow, as there is still widespread payment abuse for SMEs in the construction and infrastructure supply chain. It will be a great lost opportunity if we do not all learn from Carillion’s failings.

“We particularly welcome Network Rail’s new monitoring processes and we would like to see their stand on retentions followed throughout their supply chain. Public sector procurement has a key part to play in reforming this outdated practice. However, until everyone abolishes retentions, we need urgently now an intervention like the Aldous Bill, to ensure that if retentions are deducted, they are protected and SMEs do not lose their cash.”

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