Great Western Coffee Shop

NETWORK Rail (NR) has announced a series of “sweeping reforms,” which will enable the private sector to play a more active role in delivering major infrastructure projects.

The measures are being put forward in response to a review into NR’s business practices by Professor Peter Hansford, which followed a series of cost overruns on major engineering projects.

The reforms being put forward in the wake of the review include:
• publishing a regular pipeline of third-party project opportunities
• creating “third party project champions” to work with delivery bodies, investors and funders to ensure their projects are successful
• creating a clear service level agreement for third parties so they have clarity and reassurance regarding NR’s legal obligations
• introducing flexibility to railway standards to encourage innovation and reduce costs without compromising on safety, and
• launching a rewards scheme where money saved from introducing a new idea or innovation is shared between NR and the company or individual.

NR says these reforms will unlock new sources of funding because potential investors will have choices over which companies deliver projects.

NR recently signed a two-year signalling and train control contract with Resonate, Britain, which will see the supplier bearing risk in new technology, albeit with incentives which enable it to share any savings made from reducing delays.

NR says it plans to publish details of which projects will be put out to competitive tender by the end of this year. Initial opportunities are likely to focus on smaller projects such as new stations, depots, and car parks.

introducing flexibility to railway standards to encourage innovation and reduce costs without compromising on safety

introducing flexibility to railway standards to encourage innovation and reduce costs without compromising on safety

Background

Professor Peter Hansford (the Review Chairman) of University College London has been commissioned by the Board of Network Rail to undertake an independent review of contestability in the UK rail market to make recommendations on encouraging third party capital investment and infrastructure delivery on the national railway (Review).

Assumptions and issues

1. The overwhelming majority of new rail infrastructure on the national rail network is delivered and financed by Network Rail.

2. There is limited innovation within the UK Rail Industry when compared to other industries and most new technology is introduced through programmes led by Network Rail or other statutory bodies such as Rail Safety Standard Board.

3. For the rail network to grow and meet the exciting challenges of the future, more needs to be done to:

a) attract new funding and financing to the industry;

b) create a framework that encourages and allows new infrastructure to be developed and built by investors and parties outside Network Rail’s direct control; and

c) agree a contracting strategy with appropriate governance, controls and risk allocation which attracts market investment and generates an appetite for third parties to deliver rail infrastructure. 4. Network Rail has previously been criticised for not doing enough, despite its license obligations, to facilitate and support new investment and technology on the rail network.

Terms of reference

1. To develop and produce recommendations on encouraging third party capital investment in and infrastructure delivery on the national railway, including giving consideration to and investigating the assumptions and issues outlined in these terms of reference.

2. To consider barriers to funding and financing, clienting/ sponsorship, project delivery, asset protection, and maintenance/operation.

3. The Review will be carried out by the Review Chairman acting independently of Network Rail.

4. The output of the Review will be in the form of a report to be presented to the Network Rail Board on 24 May 2017, with an expectation that the report is circulated subsequently beyond Network Rail.

5. It is expected that the report will be made publicly available in June 2017 together with Network Rail’s response.

6. Information provided to the Review by consultees will not be provided, made available or be accessible to Network Rail.

Professor Peter Hansford FREng, University College London (Panel Chair)
Mike Gerrard, Independent
Alistair Gordon, CEO, Keolis UK
Daniel Hanson, Director, PwC
Zara Lamont OBE, Performance Improvement Director, Carillion
Andy Milner, CEO, Amey
John Smith, Managing Director, GB Railfreight
Matthew Symes, Partner, Concerto

launching a rewards scheme where money saved from introducing a new idea or innovation is shared between NR and the company or individual.