Rail 818: Network needs to be better informed, not competition

Assessing what might happen in 2017, the only certainty is that it will be ‘interesting’. This made me look up the oft-quoted Chinese proverb about ‘interesting times’ being a curse only to discover that, like many things we accept without challenge, it is not what it seems. There is, in fact, no such proverb and the expression seems to have come from a wrongly translated quote by a British departing ambassador.

There is no shortage of such statements that have become widely accepted and yet have no basis in fact. There is even much acknowledgement that we live in a ‘post truth’ world where repetition of a concept or an idea is so frequent that people begin to accept it. The fact that the referendum might have been won on the basis of the notion that £350m extra would go to the NHS is we left the European Union is only the most egregious of many such ‘post truth’ untruths. So was the idea that Trump will ‘make America great again’.

The one I would like to challenge now is a quote from Professor Peter Hansford who is chairing the review commissioned by Network Rail into why competitors are not coming forward to invest in and deliver railway infrastructure projects. In his introductory press release, the good prof said: ‘The spin-off for Network Rail is that it will drive them to become more efficient because they will have to be competitive. When you’re a monopoly, you lose the incentive for competitiveness(my italics).

This is one of those accepted bits of conventional wisdom that is the basis of our economic system and, in particular, of the ‘neo-liberal’ approach that has swept through the Western world since the days of Thatcher and Reagan. As with many of these sayings, there is a germ of truth in it. One can, indeed, become complacent when there is no one to challenge you.

However. If an organisation is plodding along without adapting to new challenges or improving its performance, that is not the result of the absence of competition. It is bad management. Therefore, for Network Rail Chief Executive Mark Carne to earn his many pennies, he ought to be looking at the management of his organisation, not the structure.

I wrote some weeks ago (Rail 815) about how Network Rail had lost so many skills because of its overemphasis on outsourcing. I received quite a lot of feedback from people within and outside the organisation who backed up my point. A couple mentioned how they had been made redundant to lose headcount, only to then be re-employed on a consultancy basis at far higher wages and with a fat redundancy cheque in their pockets.

I challenged Carne about the whole outsourcing approach at a Network Rail ‘meet the press’ event just before xmas pointing out the example of S & T (signals and telecommunication) where projects had come with very expensive estimates and had gone badly wrong. I argued that S & T was a core task and that Network Rail should have its own department to manage and even undertake projects, ensuring it was up to date with technology and had the expertise to ensure that schemes were properly specified and were not victims of ‘project creep’. Therefore, I said, there should be a permanent department as it was a core competency.

British Rail had a board level director responsible for S & T and experienced engineers in every region. All that expertise was lost at privatisation when the signalling design team was sold off, and when, tragically many of the maps and drawings relating to signalling were either given to private sector companies or ended up in skips. One of the reasons why the Great Western electrification scheme has encountered so many difficulties is precisely because no one knows where all those wires and tubes are located under the ground.

Carne disagreed, saying that at times it might be necessary to have an in house capability, but at other times it would not be. Working ‘in alliance’ with the private sector, he said, would ensure that Network Rail would keep up with technological developments and therefore the partnership approach was best. I thought, frankly, that this showed a lack of understanding of the industry. No railway functions without S & T and there are always schemes to be prepared when there are none specifically on the go. Certainly, the former S & T guy I talked to recently said that projects were properly managed in the days of British Rail and that when there was spare capacity, people would be able to work up schemes to ensure there was always something ‘shovel ready’ when money became available.

The key for Network Rail is to become an informed customer. That is its biggest failing at the moment. While I have no particular issue with the thrust of the work being carried out by the good professor, the key to reducing costs and making Network Rail more efficient is to bolster up its management team and ensure that it has the capacity to keep tabs on projects. If Network Rail is successful in attracting third party suppliers who might, for example, take on the reopening of a branch line or, say, rebuild a station, then it needs to be far better at managing these projects. It is precisely these skills that are required to ensure that any third party involvement is successful.

That is the crucial barrier which the professor’s team must address. The make-up of his committee, however, doesn’t seem chosen to address this. There is no one from Network Rail on it and it is stacked with people whose companies will benefit from any new arrangement.

Focussing on ‘contestability’, the buzzword within Network Rail, is, in my view, the wrong priority. There are good reasons why the private sector has not come forward to undertake projects. The barriers to working on the railway are difficult to overcome. Older readers – with good memories – will remember the attempt by the late (and still lamented) Sir Alastair Morton to create Special Purpose Vehicles to carry out work on the network. Or even older readers will recall that on its creation Railtrack was supposed to be a mere contracting organisation handing out everything to third parties. As I have always stressed, the best railways are those that are integrated, with the various functions being carried out together in cooperation, rather than being informed by the need to compete. Let’s hope the work of Professor Hansford recognises this.

 

Mystic Wolmar sticks his neck out

 

A New Year would not be complete without predictions from old Mystic, who did rather better than usual last year but that is not saying much. So here is the usual ragbag of thoughts

 

  1. Despite promises to the contrary, no spade will be turned on HS2 as opposition grows and confusion over routes remain. There will also be difficulty in finding a new chief executive.
  2. The Southern Railway dispute will still be going on at the end of the year….
  3. …for which Chris Grayling, the transport secretary will pay the price as he is shown the door.
  4. Franchise bidders get even thinner on the ground and several contests have only two companies interested. As a result, several franchises are further delayed and questions are asked over the future of the programme. Peter Wilkinson, the head of franchising at the Department who will not be in his job at the end of the year, will resort to the Irish tinker approach knocking on doors: I’ve got a load of tarmac here, do you want your drive done cheaply?
  5. The performance of the railway will continue to deteriorate as pressures mount because of high passenger numbers and bad weather affects the network although….
  6. Passenger numbers will not increase during the year as the effects of Brexit and uncertainty begin to hit the economy.
  7. Oh, and Donald Trump will be up for impeaching or already gone.
  8. And indulge my football prediction: QPR will not go down or up, Brighton, Newcastle and Leeds will be promoted, while Liverpool will chase down Chelsea for the Premiership title.

 

I must slightly correct the impression I gave in the last issue. Vivarail had actually signed up to test their vehicles with a possible introduction on London Midland between Coventry and Nuneaton, giving some purpose to the famously almost unused Ricoh stadium station but as there was a fire on the test train and the project is now much delayed. I really hope it was not the curse of Mystic since I wish the scheme the best of luck, as something innovative and ambitions.

 

 

  • CorBlimeyJerkin

    Unusually for me, I agree with all the sentiments in the main section. Mark Carne is clearly out of his depth and needs to bone up rapidly on how to avoid being a complete no-hoper.

  • Paul Holt

    Quibble about MW #8: Does “…Liverpool will chase down Chelsea…” mean that Liverpool will finish second to Chelsea or that Liverpool will overtake Chelsea?

  • Paul Holt

    Further to my clarification request over MW #8 below, MW #6 (related to MW #2) says that passenger numbers will not increase during 2017. Given the continuing strikes on Southern and their contagion elsewhere (as the RMT wants), will CW diligently ascribe cause, effect and blame or will he lay everything at the feet of the universal scapegoat? People, in despair, may return to their cars if their trains are strike-bound.

  • Paul Holt

    Further to MW #2 above, assuming MW is correct, will CW have formulated a viable solution by year-end?

  • Paul Holt

    Further to MW #5 above “…performance of the railway will continue to deteriorate…”, will CW distinguish between strikes and the mentioned high passenger numbers and bad weather?

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