Civil Engineering Contractors help cash flow
Two of the UK’s top civil engineering contractors have announced payment schemes designed to help improve their suppliers’ cash flow.
Balfour Beatty and Kier have both introduced supply chain finance schemes, originally launched by Prime Minister David Cameron last October, which allows the firms suppliers to have access to funds owed to them, in return for a small fee, once an invoice has been approved. The scheme, which is voluntary, has been in operation by Balfour Beatty since March and operates via an online portal and adds approximately 0.13% onto the cost of an invoice.
The new payment scheme will be available to all of the civil engineering contractors’ suppliers, and will be rolled out in full over the next year with around 10% of its suppliers expected to take up the facility at some point. Meanwhile, Kier has revealed it has not yet had any take up on its similar scheme, despite setting aside £10m to help finance it. There are a number of other civil engineering contractors considering using their own schemes, including Galliford Try, ISG and Willmott Dixon and Wates.
Martin Chown, procurement director at Balfour Beatty Construction Services UK, said the scheme was simple to sign up to. “It is just one of the initiatives that we are committed to delivering in order to better support the small and medium-sized businesses we work with,” he said.
Balfour Beatty is now the UK’s largest construction and civil engineering contractors, and has won an £87m contract to develop commercial space near Regent St in London. It will build two eight-storey building totalling 260,000ft and construct a 10,000sqft piazza running between Regent St and Haymarket, and the project will be the firms’ sixth commercial development in the capital when it gets underway in the autumn. It is also due to start a £125m student housing scheme in Texas.