EC Harris head of rail Steve Parker on driving 25% efficiency gains in rail
Earlier this year Network Rail’s budget was set for Control Period 4 at £28.5bn, however, this budget is 8% less than original proposals of £31.1 bn.
This has created the need for those involved in the development and maintenance of our national rail network to achieve even greater cost savings and efficiencies than the ambitious targets set previously.
Considerable savings are needed and cutting operational expenditure won’t be enough.
A long term asset management approach that drives value from the operation, maintenance and renewal of railway assets can achieve up to 25% efficiency gains.
Steps to success
Efficiencies can be achieved through implementing an approach which optimises asset management, to determine the best preventative maintenance and renewals intervention points. Furthermore, a balance between Capex and Opex spend is critical, based on a decision framework derived from a systematic approach around asset behaviour and technological advancement.
To drive efficiency gains into operational expenditure, programme maintainers should:
- Always start with an accurate asset register and a system to track and control asset health
- Understand the asset’s performance targets and align the asset management strategy with long term business objectives and financial plans
- Ensure the supply chain is focused upon client needs which encourage sustainable long-term relationships and drive innovation and efficiency - establishing robust performance measures
- Reduce the cost of operations and maintenance through optimal whole-life planning and best value programme management
- Determine the optimal time to invest through robust investment forecasts underpinned by future passenger demand
- Put in place the right leadership and culture to change current prevalent practices to secure commitment to a different plan and approach.
At the heart of the overall strategy should be the passenger, with a focus on maintaining and enhancing the passenger experience.
Those that achieve effective asset management will extend the life of their assets, maintain or enhance their ultimate value, make them more available and reliable for passengers, and manage regulatory and safety demands more successfully.
Achieving business objectives
The focus of asset management in the UK rail industry has been crystallised around privatisation and regulation.
Fundamentally though, it is also recognised as a highly desirable “steady state” to aspire to for any vertically integrated railway system around the world, as a means to providing a safe and reliable service to passengers.
Railway companies that get this right will drive up to 25% efficiency into their operational programmes and deliver to their overall business objectives.
As they seek to balance varying stakeholder priorities they will maximise the financial and economic benefit from the development, delivery and operation of their assets.
- Steve Parker is head of rail at EC Harris