ORR to be “fundamentally reviewed”

“The role and responsibilities of ORR will be fundamentally reviewed,” said Secretary of State for Transport Patrick McLoughlin following the publication yesterday (November 25) of Dame Colette Bowe’s report into the Control Period 5 enhancements programme planning.

McLoughlin said: “It is important that the regulatory regime is supportive of, and responsive to, the challenges of planning and managing complex infrastructure projects that by their very nature evolve and change over time.”

In her report, Bowe recommended: “The role of the ORR in respect of enhancements planning should be reviewed.”

The Report of the Bowe Review into the planning of Network Rail’s Enhancements Programme 2014-2019 was released yesterday (November 25). Bowe had been tasked by the Government in June with reporting on lessons learned from the planning process for CP5 enhancements.

“I conclude in this report that there is no one overarching cause which explains the cost escalation and delays to projects and programmes in the current Control Period, which if corrected would prevent it from recurring,” says Bowe.

“Instead, a number of issues have combined to require this programme to be reviewed and elements to be replanned.”

The report outlines these issues as:

• Planning processes, which had been thought to have worked successfully at the previous Control Period, have been shown to be inadequate in the face of the scale and complexity of the CP5 programme - including, very importantly, proposed electrification works on a scale not attempted before in the UK.
• The definition of organisational responsibilities between the Department, Network Rail and ORR. These were unclear, lacking the relentless focus and clarity required for the design and execution of a major infrastructure programme.
• The fact that the overall plans encompassed a complex portfolio of schemes, subject to poor scope definition from the outset and ongoing ‘scope creep’ which led to cost increases.
• Issues of effective internal programme and portfolio management, notably at Network Rail, where a combination of changing internal structures and responsibilities obscured lines of accountability for efficiency and delivery.
• When it came to delivery, early costing errors, unanticipated interdependencies, lower than expected productivity and the failure to ensure agreed front end scope definition have also contributed.

Bowe says that the change in accounting classification to put Network Rail’s debt on the public books in 2014 was a compounding factor. She says that while this was not a cause of cost escalation, “reclassification exposed a previous reliance by all parties on access to financing that was off government balance sheet as a means of managing financial overruns”.

Responding to the report, McLoughlin said he accepted all of the recommendations and “will take urgent steps to develop and implement a number of actions to put in place an improved approach to planning and delivering rail infrastructure enhancements”.

• For more on this story, see RAIL 789, on sale December 9.