Network Rail: Billing

Department for Transport written question – answered on 19th September 2018.

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Photo of Lord Berkeley Lord Berkeley Labour

To ask Her Majesty's Government what payment terms Network Rail is required to apply to its suppliers; whether they take action on any supplier who imposes longer payment terms on sub-suppliers; and if so, what action.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

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.

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