The Specialist Engineering Contractors’ Group has welcomed reports that Crossrail will be using project bank accounts on all its major contracts.
This means that payments for firms in the supply chain delivering Crossrail’s projects will be paid directly out of a ring-fenced bank account.
Trevor Hursthouse, chairman of the SEC Group, said: “This is an historic step. It will dramatically change construction industry payment practices with the result that cash flow to the supply chain, especially to SMEs, will be assured”.
The Office of Government Commerce has estimated that the use of fair payment practices such as project bank accounts will reduce the cost of construction projects by as much as 2.5%. This will represent significant savings to Crossrail as well as reducing the risk of insolvencies which invariably cause disruption to projects.
Hursthouse added: “Crossrail has now set an example for all public sector to clients to follow. We hope to see project bank accounts used as standard on all public sector projects.”
The SEC Group comprises: the Association of Plumbing and Heating Contractors; the British Constructional Steelwork Association; the Electrical Contractors’ Association; the Heating and Ventilating Contractors’ Association; the Lift and Escalator Industry Association; and SELECT (Electrical Contractors Association of Scotland). Together these associations have a total membership of 7,120 firms.