If anything encapsulates the ridiculous way that the railway industry is structured and regulated, it is the decision by the Office of Rail Regulation to confirm the £14m fine on Network Rail as a result of the post Xmas fiasco at Rugby and elsewhere.
Of course, there is no doubt that Network Rail made a terrible mess of the project and ignored warnings about the fact that the scope of the work exceeded its capability. However, for ORR to take £14m off Network Rail knowing the money will simply end up in Alistair Darling’s big coffer defies any attempt to explain it. The statement justifying the decision by ORR’s chief executive, Bill ‘Oooh, you are awful’ Emery, makes about as much sense as his namesake, Dick, used to: ‘We consider that to accept Network Rail’s proposal to mitigate the fine in its entirety would reduce the effectiveness of the incentive that penalties place on the company to secure compliance with its licence.’
No it wouldn’t, Bill. Network Rail has, rightly, been publicly carpeted but it does not have shareholders who will be affected by this fine. Nor is there any chance of Network Rail losing its licence since the railway would stop! The managers of Network Rail will be unaffected by the imposition of this fine and it is ridiculous that suggestions by Passenger Focus to spend the money on passenger improvements – with a bit of effort, a special fund could have been created – have been rejected out of hand.
The fundamental point about this episode is that it highlights the way the industry structure is based on a deceit, the notion that Network Rail is a private company. That pretence underpins the whole structure because everyone in the industry knows that it is a Big Lie. Network Rail cannot ‘move forward’ and improve its inefficiency (to use that ghastly management speak) until the real situation is made clear. The governance and regulation of Network Rail is not – to continue the management speak – ‘fit for purpose’ and everyone knows that. However, imposing arbitrary fines does nothing to improve it.
It is not the only Big Lie hampering the workings of the industry. I seem to come across them almost daily, and here is another example, the relationship between franchisees and the Department. For a programme I am presenting on BBC Wales (called Week in, Week out and due to be screened on June 10th, though subject to possible variation) about the recent troubles on the First Great Western franchise, I interviewed Phil Inskip of the Severn Tunnel Action Group about service cuts that had affected local commuters travelling into Bristol. These were introduced in 2006 when the new franchise started despite warnings and involved the removal of the first five trains from Severn Tunnel Junction station, meaning there would be no service until 08 25, too late for many commuters who, not surprisingly are anxious to avoid driving over the overcrowded Severn Bridge.
Although it was First Great Western which introduced the cutbacks, Mr Inskip is clear where responsibility for the reduced timetable lies: ‘It was the Department who specified the franchise and therefore it was their responsibility’. Yet, whenever he or his fellow campaigners try to talk to the Department, they are passed onto the First Great Western because it is an operational matter. To FGW’s credit, many of the services have been restored even though at one time the trains only had two cars and the overfill had to be taken by coach to Bristol which took twice as long. Now virtually all the services are operating but with usage growing by over 10 per cent annually on trains that already often have 60 people standing in a carriage, only a recession will stop the problem from re-emerging in the next couple of years. Yet, the Department seems to be turning a deaf ear. Mr Inskip says ’It seems the Department is little more than the transport division of the Treasury. If we get an acknowledgement of out emails, we feel we have done well. Most of the time they simply ignore us.’
I reckon that Tom Harris, the rail minister, will have cause to regret the extraordinary letter he wrote to Rail two issues ago. He said that it was a myth that ‘the DfT determines the amount of rolling stock or staffing levels which First Great Western… is allowed to use’. This seems to be contradicted by the franchise contract – a public document – which specifies, in very great detail, precisely how much rolling stock is to be used and goes into fantastic detail on various matters such as the number of station toilets that are to be refurbished (a list of 18). There is even an appendix which stipulates that the FGW has to run an extra service from Oxford in the evening stopping at Tackley, Heyford, King’s Sutton and Banbury. If that is not micromanagement, what is it?
Harris went on to say that the alternative to the present situation was ‘a nationalised industry with ministers making decisions on timetables, rolling stock and staffing levels’. But that was never the case with British Rail. It was given a single budget figure which, for sure, was inadequate most of the time, but within that it had the freedom to make all those decisions. Franchisees do not. Mr Harris is an intelligent and canny chap, but he is very ill-advised by his civil servants in the Department’s rail division.
It is interesting that far from blaming the First Great Western, Mr Inskip, and other passenger representatives I spoke to for the programme, point the finger straight at the Department and its ministers. It is an irony given that one of the main aims of privatisation was to ensure that the government never got the blame for what was happening on the railways.
These Big Lies – and there are many more of them – are important because they are ultimately costly. The industry is nowhere near transparent, either in its accounting or in its organisation. The more obfuscation and dishonesty, the greater the cost. There is, at the end of the day, no intellectual justification for ORR’s action, and, in turn, that highlights a much bigger problem over the governance of both Network Rail and the franchises.
Incidentally, while I was at the Severn Tunnel, I was privileged to be taken into it to look at work being carried out during a blockade that weekend. The tunnel which was completed in 1886 after 13 years of construction, is in remarkably good condition and much drier than I had expected, despite the occasional drip on my helmet. However, it does require constant attention and when I was there it was the subject of one of eight weekend blockades, and a series of one day closures which are required to replace 14,000 cable hangers on the sides of the tunnel. It is one of those undramatic but necessary schemes which never make the news but which are essential for the maintenance for safe and reliable rail journeys. And, of course, the cost eventually finds its way either to the passenger or the taxpayer.
Cleverly, the contractor Amco, has devised a system which involves drilling six holes, enough for 3 metres of tunnel, simultaneously from a special wagon which has a cage that prevents the workers from falling on the other track. Therefore, single line working is possible while the drilling is being undertaken.
It is that sort of innovation which, in the past, the industry seems to have failed to introduce and which Network Rail must now . Undoubtedly, it is heading in the right direction but, as even some of its managers admit in private, not fast enough. This was shown by the recent comparisons which show that work is far more expensive here than in Europe, and that, for example, in Switzerland quite major work was carried out in tunnels without possessions, unlike say the two month blockade required for work at Ipswich in 2004.
There is no doubt that Network Rail is conscious of the need to improve its processes but whether the current regulatory structure helps it do that is very much open to question. Indeed, £14m fines may hamper the process, making the organisation more risk averse and consequently less efficient.
St Pancras mystery remains
A quick mention of the St Pancras mystery space. The suggestion that the space was a safety requirement is, apparently, mistaken. The ORR has written to me to say that ‘the area beyond the buffers up to the security screen on the Eurostar platforms at St Pancras has not been provided to satisfy any safety requirements of ORR nor does it contain a “crumple zone”’. The buffers are designed to absorb the impact of an overrunning train by sliding with increasing resistance, to bring the train to a halt before it hits the platform end.
However, on the domestic platform there is a longer sliding distance (which makes people walk longer to catch the trains).ORR says: ‘ While the risk of the buffers travelling over the full range was considered to be extremely low, it was considered appropriate to allow for such an eventuality’, the platform ends have ‘decking’ that is designed to fold up on impact. Moreover, the guidance I cited about not having space normally occupied by the public 20 metres from the buffer stops has now been rescinded because of the introduction of TPWS.
None of that, of course, brings us anywhere nearer the explanation for the waste of space. The search continues…