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<p>The Department has been working closely with BIS, Cabinet Office and industry to
consider how Government can help the UK steel industry meet the challenges it has
been facing.</p><p> </p><p>The bulk of infrastructure projects within the Department
are being delivered by the Department’s Arm’s Length Bodies (ALB), in particular,
Network Rail, Highways England and HS2. Cabinet Office guidance on the approach to
steel procurement has been circulated to the Accounting Officers of each ALB and procurement
and commercial teams within these organisations are aware of the need to:</p><p> </p><ul><li>Signal
the future pipeline of requirements on steel sourcing and best practice in pre-procurement
market engagement;</li></ul><p> </p><ul><li>Ensure there is clear visibility of opportunities
at sub-contractor level where the source of steel has not been defined by a Tier 1
contractor;</li></ul><p> </p><ul><li>Assess the health and sustainability of potential
suppliers in the supply chain at selection stage, including compliance with relevant
health and safety and employment legislation;</li></ul><p> </p><ul><li>Ensure that
the price or cost calculations are based on an assessment of the whole-life cost and
not lowest purchase price;</li></ul><p> </p><ul><li>Take account of appropriate social
and environmental impacts at the award stage where they are linked to the subject
of the contract.</li></ul><p> </p><p>As with the rest of the materials for construction,
steel is procured by the supply chain for the majority of our infrastructure projects.
The Department and its ALBs are complying with the Cabinet Office guidance and ensuring
that, for instance, where appropriate, assessment of social and environmental impacts
are considered as part of the evaluation criteria. The Department and its ALBs also
positively encourage bids from British companies and are holding discussions with
UK suppliers to make sure they are in the best possible position to win contracts.</p><p>
</p><p>Activity currently underway is as follows:</p><p><br><strong>Network Rail</strong></p><ul><li>Network
Rail buys approximately 120,000 tonnes of steel for rails per annum directly from
British Steel in Scunthorpe, which is around 96% of Network Rail’s total aggregated
demand by value.</li></ul><p> </p><p><strong> </strong></p><p><strong>Highways England</strong></p><ul><li>Highways
England does not procure steel materials directly, however over the last five years
Highways England has used a category management framework as the main method of procuring
steel gantries for the Strategic Road Network.</li></ul><p> </p><ul><li>To date circa
95% of this steel has been drawn from British Steel in the UK, which equates to approximately
11,000 tonnes of steel. The approximate framework spend is £30 million, of which about
35% will be steel procurement i.e. raw materials, and will equate to around £10.5
million.</li></ul><p> </p><p><strong>Crossrail</strong></p><ul><li>The 57km of steel
required for the rails of Crossrail’s brand new central tunnel section is being sourced
entirely from British Steel in Scunthorpe. This equates to 7,000 tonnes of steel.</li></ul><p>
</p><ul><li>Crossrail Ltd does not directly procure steel as this is undertaken by
their tier 1 contractors and their supply chains. However, Crossrail keeps an oversight
of its critical contracts and estimates that 85% of its supply chain providing steel
to the project is UK based.</li></ul><p><strong>HS2 </strong></p><ul><li>It is estimated
that HS2 will need approximately 2 million tonnes of steel over the next 10 years.
The procurement for the main civil engineering works between Euston and Birmingham
is now underway with procurements for the stations and rail systems expected to commence
later this year and for rolling stock in early 2017. Subject to Royal Assent, the
project will start construction in 2017.</li></ul><p> </p><ul><li>As with the rest
of the materials for construction, steel is procured by the supply chain. HS2 positively
encourages bids from British companies and is already holding discussions with UK
suppliers to make sure they are in the best possible position to complete for contracts
for the steel that will be needed for track, concrete reinforcements, overhead wires
and other structures.</li></ul>
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