Network Rail is in transition. Its bosses are keen to shake off the perception that it is difficult and obstructive to work with.
It is no longer a case of what can the supply chain do for it, rather what can it do for the supply chain.
“We’re really trying to remove obstacles as we’re seen to be difficult to do business with,” says Network Rail Open for Business programme director David Ollerhead.
“It’s not necessarily about doing physical things, it’s more about how do we open ourselves up, how do we become more responsive, more customer focused and easier to work with.”
The transition is essential to its future. In June last year a report conducted by ICE past-President Peter Hansford said that the track operator must radically change its behaviours and processes if it is to become cost efficient and attract more third party funding.
Network Rail accepted the report’s findings “wholeheartedly” and declared itself “open for business”.
The creation of Ollerhead’s role is one of the first manifestations of this. He took up the post in September last year having spent four years as head of Network Rail’s business change practice.
Network rail david ollerhead crop
One of the biggest changes – in what Ollerhead describes as the “brave new world” of financial control period 6 (CP6), from 2019 to 2024 – is the restructuring of the organisation into eight new geographical businesses based around main UK routes.
Those eight, along with a dedicated freight group, will be devolved from the central Network Rail organisation and will have their own powers and funding. The aim is to provide a better, more local service.
But to make the transformation work, key projects will require investment from local bodies and third parties to support that growth. It is with these potential funders that the body is now hoping to be more open.
Ollerhead says one of the biggest issues concerns asset protection.
Probably the biggest thing our suppliers can do for us is challenging standards
“This is one area where third parties have said we’re particularly difficult to work with,” he says. “The ones we have spoken to say we’re a bit possessive and defensive around our assets.
“Rather than say: ‘here are our assets and the best way to protect them is to stop people getting on them’, actually, the best way is to ask ‘how do we get the best value and the best use out of the assets?’,” he says.
Network Rail is planning to recruit a head of asset protection and optimisation for each of the newly devolved routes to try to up its game on asset protection. This will help the new regional divisions give local knowledge of particular issues and challenges on their patch, says Ollerhead.
Third party challenge
But more than that, Network Rail is inviting third parties to challenge its standards.
“Probably the biggest things our suppliers can do for us is challenging standards, as in a way, rail can be quite be quite parochial,” he says. “It would be fantastic if people came to us and said: ‘here’s a better way of doing it’.”
In March this year, Network Rail finished updating of 400 of what Ollerhead describes as its most “overly complex” standards, with the aim being to reduce cost complexity and encourage innovation while maintaining safety standards. At the same time, it invited stakeholders to proactively challenge the way things are done on the rail network and suggest better ways of doing things to increase creativity and innovation.
It hopes to be able to incentivise companies to do this, although Ollerhead is keen to point out an incentive does not always come in monetary form.
Demand for the railway is growing, but how does that translate into a return for investors?
“Incentivisation can be quite hard to quantify, but it’s things like doing an annual award ceremony, about publicising achievements,” he says. “A lot of companies have said to us that if we recognised them for improving one of our standards, that for them is a really fantastic thing.”
Ollerhead also says Network Rail has to find more appropriate financial models for risk sharing and invites suggestions on new ideas.
“[Risk] is a really difficult, intractable problem and if I was to say we’d got the answer right now, we haven’t,” he says. “But we are absolutely working on it and it’s really important that we try to crack that.”
He says service level agreements between Network Rail and its suppliers are being worked on to make them more transparent and so it can be more visible about how it is performing.
One of the more obvious steps it has taken to boost transparency is to publish a list of projects for which it hopes to attract third party funding.
This differs from the list of market-led proposals published by the Department for Transport, an example of which is the well publicised Heathrow Southern Rail link, a new 13km long stretch of track connecting Heathrow Terminal 5 to the existing rail network north of Chertsey.
Ollerhead says projects on Network Rail’s list have been picked more for their simplicity and to test the new processes it is putting in place.
Third party funded
Cardiff Parkway Station and the Felixstowe loop (pictured) are good examples of third party funded schemes, he says. In Cardiff, real estate company Cardiff Parkway Developments has funded a new station to bring in jobs and make a new business park viable.
In Felixstowe, the double-tracking of around 1.4km of track to unlock a bottleneck for freight accessing the port is being paid for by port owner Hutchinson Ports in the hope of increasing the throughput of freight.
Other examples on the list are the refurbishment of Leeds station and the Cumbrian Coast Line Upgrade.
A second batch of projects is expected to be published later this summer and it is hoped this will include opportunities where return on investment would come from passenger or freight growth, although Ollerhead admits this is a trickier area to venture into.
“Demand for the railway is growing,” he says. “But the challenge is: how does that translate into a return for those investors? There’s not an easy answer for that and you’d have to do it on a case by case basis.”