As a supplier dependent business, Network Rail works hard to foster a sustainable supply chain at all levels. Network Rail currently operates a Fair Payment Charter intended to protect lower levels of its supply chain.
Network Rail announced on 20 June significant changes to its contracts ahead of the next five year control period, which will build upon the measures set out in the Charter. One of these changes will require larger suppliers to pay their subcontractors within 28 days and remove the use of retention on those payments. Once these contractual changes have been implemented, failure to work in accordance with these requirements will be a technical breach of terms.
Network Rail is also introducing the use of project bank accounts on some of its major projects, meaning payments to subcontractors can be agreed by the client and scrutinised more closely.