RAIL 813: A watershed at Network Rail

When Theresa May became Prime Minister in July 2016 after the ‘Brexit’ referendum, she sacked Chancellor George Osborne, prompting commentators to claim that she was going to kill off his flagship ‘Northern Powerhouse’.

This would have been politically suicidal. How the country voted in the referendum clearly showed the folly of ignoring the Midlands and North. For unambiguous proof of the political resilience of the Northern Powerhouse, look no further than our high-octane National Rail Conference, in Manchester on November 1 (see News p8-9). Sponsored by Alstom, The Morson Group and Systra, chaired by Steve Norris and attended by 170 delegates, the NRC was a mouth-watering hint of northern things to come. (It also highlighted a potential fly in the ointment, but I’ll come back to that. Let’s stick with enthusiasm, optimism and potential.)

All speakers delivered terrific presentations: may I highlight those by Manchester City Council Leader Sir Richard Leese, Transport Scotland Rail Director Bill Reeve and Northern Managing Director Alex Hynes. Leese was the exemplar of strategic leadership, Reeve showed what such leadership has already achieved in Scotland while Hynes delivered a masterclass in conference presentation which painted a very exciting picture. Individually they were exciting - taken collectively, they had me mentally punching the air.

RAIL has argued the devolution case for many years. I originally pointed to successes in Germany, where devolved decisions had pioneered superb light rail and tram-train successes in Kassel and Karlsruhe. Then we were delighted by what happened here in terms of devolution in Scotland and London, where Transport for London set new standards. RAIL has always believed that the closer to a region’s railways the decision making is, the more efficient and successful those railways will be.

Bill Reeve outlined what Scotland has achieved in 11 years of devolved authority over its 358 stations and 1,761 miles of railway: £7 billion of investment in new and expanded railways, electrification and new trains. There were 93.8 million passenger journeys last year - an increase of 35% in the last decade. 

Successful rail projects have included the complete upgrade of Edinburgh Waverley, route reopenings between Stirling-Alloa-Kincardine and Airdrie-Bathgate, Paisley corridor enhancements, new Class 380 trains, refurbishment and upgrades at Edinburgh Haymarket, Cumbernauld electrification and finally, creation of the Borders Railway using part of the long-closed ‘Waverley Route’. In the early 2000s the Borders proposal was dumped by the Strategic Rail Authority - its spokesman described it at the time as: “....an indulgent and hopeless, pie-in-the-sky, basket case.” What more powerful example of devolved-versus-remote decision-making could you want?!

With Scotland as an inspirational context, Sir Richard Leese’s strategic vision for the North, reinforced by Transport for the North Chairman John Cridland, was enticing. Both made clear that incremental improvement of both road and rail isn’t acceptable. Leese was blunt that Manchester-Sheffield road traffic would never improve without a new trans-Pennine road tunnel. Likewise he laid bare an equally powerful rail truth: that east-west rail improvements must not be marginal but transformational and this means a four-track main line railway from Liverpool to Leeds. The aim is 20-minute journeys between Liverpool and Manchester and 30 minutes in the Leeds, Sheffield and Manchester triangle. Sadly, there was no mention of Woodhead.

If Scotland showed what can be done and Leese and Cridland outlined what should be done, Northern MD Alex Hynes outlined what is being done right now. 

The new Northern franchise is scheduled to deliver a new diesel and electric fleet, oversee the withdrawal of the unpopular ‘Pacer’ by 2020, drive a 37% capacity increase, run 2,000 extra services a week by 2019, complete a £60m stations plan, provide free WiFi, faster inter-urban links, more Sunday services, improved accessibility, community use of redundant buildings, mobile ticketing, contactless payment on trains and a host of other developments. Not bad for a franchise which in 2004 committed to no more than running a few more trains on time. 

But there is a potential problem. All major improvements will depend on the efficient delivery of infrastructure by Network Rail - so recent experience casts a shadow. It’s uncomfortable for NR, but there is an increasingly widely-held and openly-expressed view about NR’s ability to specify, control and efficiently deliver even modest projects. Great Western electrification costs exploding from £800m to £2.8bn cause concern - but even proposed modest route reinstatements like Wisbech-March at £100m+ for seven miles, or a plain vanilla station reopening like Gilsland, on the Newcastle-Carlisle line at £28m do not inspire confidence.

At the NRC, Transport Scotland Rail Director Bill Reeve’s presentation contained the slide on the left. TS believes that the process of designing and delivering to cost can and must be improved. Scottish Transport Minister Humza Yousaf is already demanding full infrastructure devolution from NR. 

It is encouraging that the keynote first speech at the NRC was by NR Chief Executive Mark Carne - who was upbeat and committed repeatedly to tackling NR’s failings. “We have to transform ourselves to behave like a private sector business,” he said, which means changing its culture, delivering real customer focus, achieving business cost competitiveness and driving yet more devolved power to the Routes. Those who believe that NR’s Infrastructure Projects function still needs to be brought under the control of the Routes may draw comfort from Carne’s comments. “I have to try to create that cost competitive urge. One of the ways we can do that is by saying that activities that can be delivered on behalf of all the routes have to be competitive on the open market...or I will open them up to the open market.”

Carne is certainly saying the right things.NR Chairman Sir Peter Hendy has also said that if anyone can tackle projects like Wisbech cheaper than NR, then they should do so.

However, Mark Carne insists that NR is changing in the way TS (and many others) insist that it must. If Carne and Hendy mean what they say then NR’s IP function needs to urgently wake up, shape up and really act like its very survival depends on pricing, service and reasonable standards. Because it could. 

I believe that this is a watershed for NR. If its IP team does not quickly reform as Carne requires, he must act. We have the best railway we have ever had - but it still costs too much.

Comment: RAIL 813: November 9 2016 - November 22 2016