Posted 16th July 2015 | 4 Comments
ORR denies Network Rail 'split up' reports
THE Office of Rail and Road has denied reports that the rail regulator is calling for Network Rail to be divided into a number of regional businesses.
The Financial Times has claimed that the ORR wants the change to improve efficiency, reduce costs and allow comparisons of performance by using benchmarking.
The report has followed signs of turmoil at Network Rail, most recently when it was revealed that the NR Board was aware that the CP5 budget was not enough to pay for the full enhancements programme well before the general election.
This revelation is set to anger politicians, because the Conservative Party manifesto had indicated that all the schemes, including Northern Transpennine and Midland Main Line electrification, were set to go ahead under a Tory Government. In reality, the NR Board was discussing modifications to the enhancement programme in private as far back as March. The minutes of the meeting have only just been published.
Top level changes have already taken place at Network Rail, where chairman Professor Richard Parry-Jones has been replaced by Sir Peter Hendy, while Richard Brown has been appointed as a special director of NR and will now report directly to the transport secretary.
Following the overnight claims from the Financial Times, the ORR told Railnews: "The Chancellor’s 2015 summer Budget included proposals to change the way government support is channelled to the rail industry and devolve more power to Network Rail’s route managers. The reforms, building on recommendations set out in our long-term regulatory framework statement in 2013, have significant potential to improve the way that the rail network operates.
“ORR's proposals focus on the way regulation of Network Rail can help underpin devolution to its eight routes, maximising the benefits of comparative regulation and ensuring a focus on the different challenges in different areas. This approach would require the creation of a more clearly defined national ‘system operator’ to deal with the network wide planning and capacity issues. While decisions on the structure of the railway are a matter for government, ORR is exploring options for a different way of regulating Network Rail, to drive up the quality of services and increase value for the railway's customers and taxpayers."
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Joe Merieux, London
But isn't there a major tension between devolving priorities and investment decisions to routes and then trying to hold Network Rail to account?
One of the issues is the failure to deliver some major projects on time (electrification, new signalling) which are complex and technical and need a lot of expertise to make happen - often coordinating resources nationally so that electrification trains move in a well programmed way between projects and signalling teams aren't overloaded with work. On paper, Network Rail has excellent risk management systems in place - but they seem not to work on the ground.
david c smith, Bletchley
Yes, it's my impression too that over recent years Whitehall have made a mess of various projects. So not surprisingly I'm depressed at the way more and more of the supposedly privatised Railway has come under government " command and control" ; the only bit that now is not appears to be Railfreight operations.
I had thought the main justification for privatisation was to free up enterprise, innovation and investment - all now seemingly forgotten about.
Tony Pearce, Reading
When I read how bad projects were getting and how Network Rail bosses were still claiming and ready to accept 'Big Bonuses' for their contribution I get really annoyed. It must have been obvious to 'insiders' that everything was slipping but there was no transparency about this apparently to either the Public or the Government. There is now no way that Network Rail can claim that the Public were getting 'Value-for-their-money' as they should have done. Part of the reason is that there are no Shareholders who would take a great interest in where their money was going. I despair at the number of Government projects - such as Computer Systems and re-organisations - which seem to fail completely taking huge sums of money with them. But the last thing we need at the moment is yet a re-organistaion until we know exactly what went wrong with the projects particularly the Great Western Electrification.
Melvyn Windebank, Canvey Island, Essex
It's worth remembering how in the run up to the election MPs on the government side were constantly asking questions about upgrades and electrification of their local lines and were given positive replies during Transport Questions, PMQs and Treasury Questions so either these ministers knew the true position but hid this in pre-election run up or they did not know which then raises questions as to their competency !
Breaking up Network Rail brings with it the dangers of being a single body together with purchasing of different products that can add to overall costs and become incompatible if something goes wrong .