Peer review: Len Porter
Asset Management Consultant and former Chief Executive, RSSB
This is a timely article, because one senses that the way the industry is currently organised and structured must evolve and change, not least because we have a new government that will be thinking about what is required to deliver a more sustainable long-term future for our railway and its finances.
Much has been written over the past decade or so about the industry’s lack of strategic long-term thinking, and its inability to plan and project-manage cost-effectively. Government and the Office of Rail Regulation (now Rail and Road) bear some responsibility, however, because they have been less than consistently helpful. his is a timely article, because one senses that the way the industry is currently organised and structured must evolve and change, not least because we have a new government that will be thinking about what is required to deliver a more sustainable long-term future for our railway and its finances.
There are various examples that one could give to illustrate this, but delivering a High Level Output Specification that dropped electrification and high-speed rail, only to put them both back in again a few years later following mounting criticism, clearly illustrates this inconsistency. For similar reasons, it has been difficult to estimate costs on larger complex projects and Network Rail, DfT and ORR have never really got this quite right. I do have sympathy with their problem, however, because improving a Victorian railway can throw up significant problems that may have been difficult to foresee before renewal or enhancement work starts.
Cost escalation as a result of poor planning isn’t good, but perhaps more damaging in the longer term is the impact on the supply chain and skills availability. We have certainly caused harm in this respect, owing to the feast and famine approach to the way asset renewal programmes have been planned - be they rolling stock or infrastructure. The current troubled electrification programme is a rather disappointing but very clear example.
Railtrack contracting out maintenance should not have been the problem it proved to be, since this outsourcing has been successful in other safety-critical industries. Not retaining a critical mass of in-house competence, introducing relevant due process and systems was, however, a major error.
Even after bringing maintenance back in-house at Network Rail, leaving the data, information systems and fragmented asset knowledge in the hands of the contracting community lost Network Rail a lot of time in implementing modern asset management practice. Nor was this helped by NR’s procurement practices, which were (for a considerable period) largely those of a bygone and much more adversarial era.
Furthermore, if you incentivise an executive team to take cost out rather than ensure that key systems and due process are in place, the problem is compounded. It is easy to do the former without the latter, but difficult (although essential) to do both at the same time. The way this is being implemented at both Crossrail and HS2, following the BIM (building information modelling) approach, are certainly good examples of the way forward.
All that said, let’s not be overly critical. In my experience, our rail industry is really rather good. In my opinion, it’s better than most in Europe and on all other continents. It has some of the best people, but structural fragmentation has led to difficulty in bringing together a critical mass of capability - whether that be in leadership, engineering, technical or operational skills. Pulling critical mass together through the various discipline leadership sub-groups has worked to a degree, but there are too many of these. Introducing the Rail Delivery Group, although well intentioned, doesn’t seem to have actually solved very much.
The rail sector’s best people are in all parts of the industry - Network Rail, passenger and freight TOCs, ROSCOs and the supply community, including both large companies and SMEs. They are not always in the bigger players, however, and may not be at CEO or even board level. The biggest, best-funded and resourced player is Network Rail, and it is hard to ignore the fact that getting NR to work effectively and efficiently would solve a lot of the industry’s perceived problems. Those working at all levels in Network Rail have difficult jobs, and much is expected of them. Philip Haigh’s article examines ways of rearranging leadership responsibility, but it’s not easy and certainly should not be made more complicated.
I would suggest that now is the time to think longer term as to what rail will need to deliver in an integrated transport sector of the future. In an age of electrically driven potentially driverless road vehicles, capable of being assembled into road trains, the railway needs to think very carefully about its role in this new world. And there is absolutely no time to waste - driverless technology for road vehicles already exists.
So an integrated transport policy with associated land use and energy policies is going to be an important consideration. In my view, Network Rail, Highways England and the Scottish equivalent should be sharing some kind of joint vision of the future - not trying to protect either road or rail, but maximising each for the benefit of the other, and bearing in mind that they may both be drawing heavily on an overstretched energy supply. Interestingly, both rail and road often draw heavily on the same supply base, and that may become more critical in the future. In my view, this is both an opportunity and a threat to GB transport plc - approached properly, I’d prefer to think of it as more of an opportunity.
The rail sector will need to work much more collaboratively in the future than it has done in the past. Contracts will need to be more of a deep partnering nature and involve all parts of the industry, including the supply chain. The TOC/NR axis is but one part. Integrated transport or rail projects are much more about multi-party relationships, technology and innovation, driving improved performance at reduced cost and with a careful eye on business risk. of which safety risk is but a part. It will need enlightened procurement relationships with GB transport plc to bring this about.
When it comes to making progress in this respect, I’m more inclined towards corporate bodies than committees, and at the heart of all this going forward is leading-edge modern infrastructure asset management. This is much better understood nowadays, with some fine documents and examples to draw on. You could argue that it is just value-driven smarter business management, and I would agree with that, but the documents leading up to and including ISO 55000 provide a good foundation.
As for organisation, I am a big fan of keeping it simple. What are our objectives? What is it that we want to deliver? I would start by getting some of the industry’s best people around a table (bearing in mind my comments earlier about leadership) to thrash this out. Then look at how to organise to deliver against that. Structure and people to populate the structure follow on from there, including at board level.
Network Rail is likely to be a key player in this exercise, which I believe would benefit them and the rest of the industry. TOCs are important, but when it comes to longer-term integrated transport, engineering, technology, project and asset management thinking, there are others (interestingly, the historically longer-term players) who are likely to be just as important in this debate. Done properly, this could reduce the dependency on our committee culture, in favour of a more inclusive corporate entity with the critical leadership mass to drive us positively towards a better future.
