There are too many business risks in becoming involved with NR. And many of these risks lie outside an investor’s control.
Hansford found little clear air between NR corporate policies and standards, and this led to third-party investors being asked to pay for things beyond their remit. He also found that different parts of NR applied standards differently, which suggests that there’s no consistent standard of understanding across NR - odd given that NR has a centralised training facility. It also suggests that there’s little commercial experience within the company that can understand that their third-party investors need to generate returns for their money.
Hansford reveals some of the reasons why NR might be such a poor customer. He found that in creating its own infrastructure projects company (NRIP), NR had stripped out project management and commercial competence from the rest of the company. NR had intended to make it easier to choose between delivering projects through private companies or through its new IP creation. Instead, it created a situation in which IP was the only part of NR with any competence to deliver projects.
On standards, he finds: “Standards themselves are not necessarily the source of the issue behind third party concerns. It is more likely that the main issues are the complexity of the standards landscape and the variations and derogations process; a lack of transparency in the process for applying standards during project development; the misuse of standards to drive ‘gold plating’; and the lack of timely decisions regarding the scope of standards-related work which can lead to unplanned impacts on construction and handover.”
As Network Rail now looks towards devolution and local teams delivering projects, it will need to think carefully about how it injects management and commercial skills into its regions.
There’s a risk that overall costs might rise with more staff. There’s a risk that it might take more time and effort than NR and its government paymasters are prepared to expend, in order to convince private contractors that it has really changed and is now serious about them playing a part in delivering a better railway. There’s also a risk that ministers decide to cease upgrading the railway, and instead concentrate simply on maintaining and renewing today’s railway.
Robertson’s questions play into the psychology of decisions as RSSB describes them in Taking Safe Decisions (see panel). It notes a tendency for decision makers to try to avoid losses rather than make gains, and the perils of framing problems too narrowly. Decisions made by rail managers have effects beyond the railway because the railway is part of the country.
The developer that builds a new housing estate next to a railway without thinking about how those householders will travel to and fro could make poor decisions - poor because they’re selfish. The railway manager who decides to skip-stop the nearby station to speed a longer journey might not be making the best overall decision in terms of the area’s transport, even if it’s the best decision for the railway. Of course, there’s a balance between selfishness and altruism, just as there’s a balance between the costs and benefits of a safety decision.
Ministers have recently halted England’s electrification programme. They probably didn’t intend to waste the investment that’s gone into designing new overhead line equipment that brings lower whole-life costs based on widespread implementation. They probably didn’t intend to waste the money that’s gone into relearning lost skills and training a new generation of linesmen. But they have wasted this money… and they’ve created a situation that has damaged trust from rail contractors.
That said, ministers faced a difficult decision in the face of sharply rising costs. But rewind the tape five years to their announcement in 2012 of a massive programme of wiring, and ask yourself whether such a programme was credible. Even allowing for hindsight, it’s hard to resist the conclusion that ministers were asking for too much, too soon. They and their advisors cannot have credibly analysed the risks surrounding their electrification plans.
Yet as the psychology panel notes, you can over-analyse a problem by casting your boundary too wide. The opposite of narrow framing can make a problem too difficult. ‘What if’ questions can go too far.
We can be certain that Brunel did not ask ‘what if someone wants to run 125mph trains?’ as he laid out the Great Western Main Line. What he did was survey a generally straight and flat route because that’s what was best for the locomotive technology he had at hand. What worked for him works today.
In Taking Safe Decisions, the RSSB shows a more developed version of the classic ‘plan-do-review’ or ‘observe-decide-act’ cycle of decisions. It has two loops. One contents itself with implementing change, while the other examines the safety aspects of that decision. You need only replace the two instances of the word ‘safety’ with whatever risk environment you’re considering and the cycle should work for you.
At the heart of unintended consequences is a poor appreciation of a situation and the effect that change might have. Countering them comes from having good leaders with the character, courage and competence to challenge what they see. In turn, this challenge should improve their thinking and the thinking of those around them. But it needs competence - and that comes from experience, training and education.
