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Network Rail under pressure for smooth start to CP6

Waterloo upgrade

Railway regulator the Office for Rail & Road (ORR) has said it expects to increase its scrutiny of Network Rail ahead of the next control period, which starts next year. 

The ORR  is prepared to challenge the operator, according to one of its most senior figures. ORR director of railway markets and economies John Larkinson told New Civil Engineer the regulator would be “stepping up” its monitoring of Network Rail before the next control period (CP6) begins in April 2019, to avoid repeating the operator’s sluggish start to CP5. He admitted the regulator had been “flat-footed” in the early stages of the last control period.

Network Rail is expected to finish CP5 which runs from 2014 to 2019 with around £50bn of debt. Larkinson admitted that the ORR had not been robust enough in monitoring performance at the beginning of the period.

As the control period began in 2014 the volume of renewals work was significantly lower than had been planned, and access arrangements and supplier contracts had not been secured.

“We’re stepping up the monitoring of how well prepared they are between now and the next control period, and we’re going to publish more information about it,” said Larkinson.

“We think that will challenge Network Rail, but we think it will also give some assurance to people because even if it’s not going brilliantly – and hopefully it will be – there’s still time to do something about it, whereas we were all a bit flat-footed last time.”

Meanwhile rail chiefs faced MPs yesterday (Monday) as the Commons transport committee’s inquiry into rail funding scrutinised the current five-year funding cycle approach. Bridgewater Consulting managing director Pino de Rosa told the committee the current control period system is “too lumpy”.

He added: “You’re trying to run a business, you’re trying to make decisions around investment in people, equipment, technology; when there are those extremes in cycles it’s [investment] more reserved, and as a result the industry works in a less efficient way.”

In December, the Rail Industry Association (RIA) argued that rail funding should be overhauled in its evidence to the inquiry. However, Larkinson said Network Rail’s efficiency must improve instead.

The Deprtment for Transport (DfT) has set aside £47.9bn of funding for CP6, mostly to cover maintenance and renewals. Funding decisions for major rail upgrades will be made separately.

A Network Rail spokesperson said: “We’re working closely with the ORR to make our plans for CP6 as robust as possible. It makes absolute sense to use the lessons from the start of the last control period to inform that work.”

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