THE ONE-STOP SOLUTION
Network Rail will now be demanding long-term commitment from its contractors. But as SNC-Lavalin’s MICHAEL GRACE and MATT PHILLIPS explain to PAUL STEPHEN, the Canadian firm has built its reputation on being ‘in it for the long haul’
The way rail infrastructure is procured, delivered and operated in the UK is set to undergo a considerable overhaul, as Network Rail continues to explore ways of encouraging and accepting private finance.
This new approach was a key recommendation of the Shaw Report, when it was published in March 2016, as a way of increasing the number of sources available to fund enhancements and reduce reliance on the taxpayer, while also supporting innovation and growth.
Third-party funding has some precedent in the UK. The construction of High Speed 1 was privately funded, and it is now owned by institutional investors, while operated on an open access and concessionary basis.
This funding approach will be tested on a large scale once again by East West Rail, a shadow company set up by the Department of Transport in December 2016 to examine the optimum way to privately design, build, fund and then operate the former Varsity Line between Oxford and Cambridge over the next decade.
Now that EWR Chairman and former Chiltern Railways MD Rob Brighouse has considered all the options and decided how best to proceed, he was due to present the findings of a three-month scoping report by the end of March, and before this issue of
RAIL went to press. The private sector will now be asked to step in, marking a step change from the conventional ‘bid and build’ tendering by the Network Rail of old.
This is where global construction and engineering group SNC-Lavalin comes in, with its worldwide experience of providing complete end-to-end project solutions. As well as engineering, procurement and construction, the company’s 35,000 employees worldwide also provide financing, operations and maintenance services in a diverse range of industry sectors.
Besides power, mining, oil and gas, the company’s market sectors include infrastructure, from roads, harbours, airports and bridges, through to rail and mass transit. But all share a common theme, as SNC-Lavalin specialises in addressing the full infrastructure life cycle, from equity investments and early financing through to operation.
The SNC-Lavalin Rail & Transit team was formally known as Interfleet Technology in the UK before its acquisition by SNC-Lavalin in 2011, and subsequent rebrand in January 2016. Now fully integrated into its parent company, SNC-Lavalin Rail & Transit also brings together its specialised teams in the UK with those based in the wider company’s home nation of Canada.
“We are quite unique in that as well as designing and building infrastructure, we can also fund and operate it,” explains Michael Grace, SNC-Lavalin’s regional director, Rail & Transit UK.
“We’re not yet doing all of that in the UK, but are we going to explore East West Rail or similar projects? Most definitely. We certainly have the capabilities to deliver it in full, but it will depend on the Government’s appetite for this new delivery model.
“The market conditions need to be right for us to compete with some of the other major contractors, who are perhaps better placed to just bid and build it (in the old way of infrastructure delivery) if that is how the Government decides to carry on doing it.”
The company’s footprint in the UK rail market also involves working in close partnership with other contractors and contributing discrete elements to a project, such as design or consultancy.
With 430 employees, spread across offices in Derby, London, Manchester, Birmingham, Glasgow and Edinburgh, the SNC-Lavalin Rail & Transit team has been able to advise clients on all aspects of rolling stock, infrastructure and rail control systems, including technologies related to high-speed rail, ETCS and electrification.
It has had high-profile consultancy roles on some of the UK’s most iconic flagship rail projects including Crossrail, High Speed 2, and the Four Lines Modernisation Programme for London Underground.
But its longer-term strategy is also to play a wider ranging role and uphold the company’s global reputation for providing end-to-end lifecycle services, which East West Rail could perhaps offer an opportunity to demonstrate.
This would also closely mirror the experiences of colleagues from SNCLavalin’s Rail & Transit teams abroad, who continue to be heavily involved in major rail projects across Canada. These include the Canada Line on Vancouver’s SkyTrain network, where the company deployed its
We are quite unique in that as well as designing and building infrastructure, we can also fund and operate it. Michael Grace, Regional Director, SNC-Lavalin Rail & Transit UK
full range of capabilities to partially finance, design, construct, operate and then maintain the 19.5km line for a contractual period of 35 years.
The line opened in 2009 and, more than 100 days ahead of schedule, was the country’s first rail project to be delivered under a public-private partnership.
On the back of that success, SNC-Lavalin Rail & Transit was able to secure contracts to help deliver a host of other large-scale rail projects throughout Canada, including forming part of the Joint Venture chosen to construct the 11km Evergreen extension to SkyTrain, which opened in December 2016.
SNC-Lavalin is also delivering the Eglinton Crossrail LRT project, for which construction began in spring 2016 to construct a 19km-long line beneath Toronto. The overall value of the project is £ 5.6 billion, including £ 3bn to maintain it for 30 years. There’s also Ottawa’s 12.5km-long Confederation Line, due to open in mid2018, where a joint venture led by SNCLavalin is delivering all aspects of the £1.2bn project, bar its final operation.
Director of Rail Infrastructure Systems at SNC-Lavalin Matt Phillips adds: “Our strength is our cradle-to-grave solution, and all the individual elements of that. Supporting contractors in a more limited capacity is part of our key strategy in the UK, but our ambition is to grow our capabilities and the scope of what we deliver in this country towards what we do in Canada.
“The project I would highlight is the Vancouver SkyTrain, which opened up a raft of other LRT projects for us, such as Evergreen, the Confederation Line, and the Edlington project in Toronto, plus there’s another five or six that are currently entering the bidding stages.”
Phillips also emphasises that the company has a strong track record not only in physical infrastructure, but also the digital modernisation of railways across the globe.
The UK’s Digital Railway programme proposes the adoption of in-train digital signalling and automatic train control within the next 25 years, to increase capacity by reducing headways between trains, and squeezing out extra paths. This is expected to be a more cost-effective and less disruptive alternative to continuously building new infrastructure for the UK’s fast-growing network.
Network Rail has invited suppliers to help shape the programme from its earliest stages by forming a cross-industry partnership it calls Early Contractor Involvement. NR hopes to shift the focus of procurement from short-term inputs to longer-term outcomes and performances, with suppliers investing more in developing technology and giving greater consideration to whole life costs. The timespan of contract delivery is also expected to be increased to cover the full lifecycle of digital assets, in some cases.
This is a modus operandi that SNC-Lavalin is already well used to elsewhere in the world, while the company’s end-to-end philosophy is undoubtedly in tune with the new spirit of Digital Railway.
“We are already heavily involved in the ETCS aspect of the programme in the UK,” adds Phillips. “And we’ve provided a lot of technical support for ATO (Automatic Train Operation) in Canada, Australia and Scandinavia in moving it across from metros and light rail operations to the main line.
“The financing and addressing of full lifecycle costs is a key aspect of our business, so there’s natural synergy there, and we’re talking about ways of doing that for Digital Railway.”
Finally, the SNC-Lavalin Rail & Transit team has another ace card to play which should give it an edge over competitors for Digital Railway contracts, when they are awarded. That is the company’s origins in the UK as Interfleet Technology, which was formed in 1994 as part of the privatisation of British Rail from its former InterCity fleet engineering division. This gives SNC-Lavalin an unrivalled insight into not only deploying the trackside infrastructure needed for Digital Railway, but also integrating sophisticated in-cab technology into UK train fleets, many of which were inherited from British Rail and are still in service.
Grace concludes: “One of our USPs is our origins as a rolling stock consultancy, and modelling whole systems with contractors. The difficult challenge with Digital Railway is going to be moving away from conventional infrastructure and putting the intelligent systems on trains. This is where we can leverage our expertise in working with train fleets to integrate 21st century technology.”