Network Rail reforms announced today will aim to see new firms come into the rail infrastructure sector, encourage innovation and boost up-front funding.
The reforms announced have come out of the review by former ICE president Professor Peter Hansford into barriers to innovation in the rail network. The review aimed to uncover the barriers to innovation and project delivery that deter potential suppliers from getting involved in Network Rail infrastructure projects.
Network Rail chief executive Mark Carne said: “A growing railway drives the economy, jobs and housing and by welcoming open competition into the core of our business we will increase the pace of innovation, creativity and efficiency and could deliver even more improvements to our railway and for the people that use and rely on it every day.
“I am determined to create an environment where innovative third party companies can compete for and directly deliver railway projects. These reforms mark the next stage of Network Rail’s transformation having already decentralised into nine devolved individual businesses.”
Under the new plans Network Rail has said it will publish a regular pipeline of opportunities for firms. There will be service level agreements so that these are delivered to the required standard. Network Rail will also create project champions who will work with outside firms to help ensure successful projects.
In order to boost innovation, firms that offer a product taken up by Network Rail will be able to take a share in the money saved by the innovation.
Under the reforms, third parties investing in the rail system could also have a choice over who delivers the project.
One of the first examples of railway projects being privately financed is Network Rail’s new two-year deal with signalling and train control specialists Resonate. Resonate is picking up much of the costs to install and run the system. If reactionary delays are reduced as predicted, the compensation paid to train operating companies will also shrink and the money saved will be shared between Network Rail and Resonate.
The move comes as Network Rail struggles to fund its troubled control period 5 (CP5). During the period, projects that have been particularly problematic include rail electrification, including the electrification of the Great Western main line, which has gone over budget by £2.1bn since 2013 to £5.58bn according to a report by the National Audit Office. In addition, earlier this month, transport secretary Chris Grayling also scrapped three electrification projects around the country which were due to take place in CP6.