Kier has had a slow take up to its supply chain finance, with only 12 firms using the scheme, according to reports in todays Building magazine.
Kier introduced a supply chain finance scheme to pay subcontractors early so long as they pay a 0.25% fee for the service. Kier followed Balfour Beatty and Carillion in announcing such a scheme earlier this year.
Carillion’s early payment scheme has been criticised by NSCC because it requires subcontractors to agree to 120-day payment terms.
Under Kier’s scheme firms are paid 21 days after invoices are approved and are charged 0.25% on each invoice by the bank. Kier has 90 days to pay back the bank. Only 12 firms have signed up to the scheme since it was trialled in May.
But Mursell said that many of Kier’s projects were small and its payment terms averaged 40 days and that made it less attractive for firms to sign-up.
The Kier model is different from other main contractors’ schemes because it is a project-by-project arrangement.
Carillion is reported to have seen the number of suppliers using its scheme rising to 266, up from 230 in August.