Cultural changes are starting to pay off
Last year this column highlighted a number of proposals aimed at improving the efficiency of rail infrastructure procurement, while allowing the industry to bring its experience and ability to innovate to bear.
One year on, changes have begun but there is still some way to go. For many years rail infrastructure procurement was rigorously controlled by Network Rail with little opportunity for real supply chain innovation or work flow security.
However, both management changes at the top of Network Rail and the McNulty Report of 2011 have prompted improvement and there is now a genuine effort by many key players to adopt a more collaborative way of working.
One proposal was the introduction of longer franchises of up to 15 years for train operating companies (Tocs). The aim was to incentivise Tocs to spend more on infrastructure given this longer period in which to recover their investment.
The refranchising process is now in full swing with West Coast, Great Western and Thameslink all currently at various stages of the process. The winner of the West Coast franchise is due to be announced in August when the level of Tocs lead investment should become clearer.
A further initiative is to give Tocs a greater say in how Network Rail procures its infrastructure works. This works both ways. It is hoped the Tocs will help to persuade Network Rail that it does not need to “gold plate” all infrastructure works, thereby driving efficiency.
On the other hand, Network Rail is often forced to work inefficiently - and in turn force its supply chain to do the same - due to pressure by the Tocs to keep rail possessions (the time when the parts of the network are shut for engineering works) very short.
If the Tocs can be persuaded that longer possessions will help Network Rail to keep its costs down, thereby benefiting the Tocs in the long term, then all those delivering infrastructure should be able to work more efficiently. This type of collaboration is already being developed between Network Rail and South West Trains.
The government’s next instrument to continue this evolution in rail procurement will come through its finalisation of the High Level Output Specification (HLOS) for the work to be done on the network in the five year period from April 2014.
The HLOS is due to be published this summer and is expected to contain a pot of money to incentivise Network Rail and the Tocs to work ever more closely together.
So how is this all working on the ground? We are aware of recent attempts by Network Rail to tender works on a more collaborative basis which were delayed due to a lack of contractor interest.
Not through lack of capacity, but because the supply chain simply did not believe Network Rail genuinely wished to change its ways.
There are very valid, historic reasons for such scepticism but what is clear is that Network Rail is making genuine efforts to improve and the rewards are there for contractors who are prepared to engage with this brave new world
- Will Gard is a chartered civil engineer and partner at Burges Salmon LLP