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'No regrets' says Winsor despite a year of upheavals

In the 12 months since NCE last interviewed rail regulator Tom Winsor, the industry has gone through one of the most difficult periods in its history. Steve Turner asks him how he feels his regulatory role is helping to shape the country's railways.

TOM WINSOR took over the role of rail regulator just over 18 months ago. In that time his team has been chipping away at reforming Railtrack's operating licence, that 'was never fit for purpose', to produce a regime that gives him more effective control over the network operator.

Winsor was chief legal adviser for the regulator's office when Railtrack was privatised, and saw corners being cut. 'I wish the Conservative government had discharged its obligations to the public instead of pandering to financiers to fund tax cuts, ' he says bitterly.

He has also persuaded Railtrack to agree to his regulatory review, effectively tying it to the efficiency target limits he has set. Winsor's targets require Railtrack to improve the value for money it gets from its infrastructure investment programme by an average of 3.6% a year.

All in all, Winsor feels a 'lot of progress' has been made in the last 18 months.

He describes the regulatory review as a 'significant document', denying suggestions by some that when Railtrack agreed to it last month it was in such a difficult financial position it had no choice. 'Two days before Railtrack signed, it wasn't going to accept, ' he says, adding with a wry smile, 'but it did the right thing'.

Railtrack's major concerns were that it would struggle to cut costs, while being expected to expand the network.

Winsor points to the £1bn a year increase in accelerated Strategic Rail Authority cash he has built in to Railtrack's budgets for the five years from next month.

'The idea of cuts is nonsense, ' he says. 'But for the extra money I want extra work and activity. The pound notes must stretch further.'

But Winsor can see that Railtrack faces a cash squeeze. The Hatfield crash could end up costing the operator up to £1bn in repair and compensation costs.

As a result he has made provision in the review for Railtrack to apply for interim reviews within the five year control period.

At these reviews Winsor has indicated he would look sympathetically at bringing forward grant money the Strategic Rail Authority has agreed to pay.

He is at pains to point out that it would not be extra money, but money Railtrack was entitled to.

It is up to Railtrack to make its case for doing this, he adds.

Winsor feels he needs to explode the myth that improved safety and better performance are conflicting aims.

'Good performance is well maintained rolling stock on well maintained infrastructure, running at line speed, without surprises, meaning every train is on time and that there is no chance of a collision.

Good management, meaning better performance and safety are two sides of the same coin.'

He points out that senior Railtrack staff like Chris Leah, Rod Muttram and Andrew McNaughton all said as much to the Cullen inquiry following the Ladbroke Grove crash. He claims that only Gerald Corbett, then Railtrack chief executive, offered a different view.

One of the changes Winsor is imposing on Railtrack's licence is for the operator to produce an asset register. This will give comprehensive details of the condition of its 32,000km of track and associated infrastructure. Because of the extent of the information required, the task is proving difficult and time consuming.

He believes such a register will help prevent another Hatfield because it will tell Railtrack which rails require replacing, before they reach the end of their safe working lives.

It is no secret that Corbett and Winsor did not see eye to eye before Corbett stood down in November - and Winsor does not try to hide the fact.

Since Railtrack finance director Steve Marshall stepped into Corbett's shoes he says the track operator has changed direction.

But Winsor maintains it has a long way to go. He feels there are two Railtracks at the moment.

There is New Railtrack, comprising Marshall and chief operating officer Jonson Cox. Then there is Old Railtrack, which hangs on to the Corbett mentality, putting profits before the interests of passengers.

'Railtrack needs to realise where it fits into the chain, ' he insists. 'It needs to realise that it is not a privilege to run trains on the network, but a right.'

Winsor adds that Railtrack is a supplier like the train operators.

Marshall realises this, he says, but has a massive task changing attitudes across the rest of the company.

He is also critical of Corbett's handling of track access contracts. He is in the process of strengthening and formalising contracts between Railtrack and the train operating companies.

He wants strong contracts that enable parties to see what is expected of them and understand the consequences of breaching them. He regards these as essential to enable parties to bond equally, with respect for each other's position.

'Corbett thought contracts, once read, were put in the bottom drawer and forgotten about, ' he says.

Winsor has seen the benefits of strong contracts in the oil industry and believes Marshall subscribes to his point of view.

'Corbett's theories are being exploded, ' he says, adding that it would have been 'far better if they had never been mentioned'.

One of the main reasons for the network's current poor state of repair, Winsor says, is because of Railtrack's failure to keep quality engineering staff.

'The chickens are coming home to roost, ' he says.

Winsor includes engineers in his team of specialists, among them Colin Brading who is engineering adviser. Brading believes that in its formative years, Railtrack actively discouraged engineers with a regime where engineers were 'seen and not heard'.

So recent announcements of Railtrack's plans to recruit more engineers are 'a step in the right direction', says Winsor. After all he argues, Railtrack is basically a construction and engineering company.

The calls, since Hatfield, for re-nationalisation of the rail industry should be ignored, Winsor says. He points out the tax payer would face a massive financial outlay - around £5bn - for which, he says, it would get nothing in return.

The assets would still be in the same condition and the same funding questions would apply, he adds.

Winsor is also a firm believer that Government should not intervene in the running of a Stock Exchange listed company like Railtrack. Rumour of government interference can affect the company's share price, damaging its ability to raise funds for infrastructure investment.

'The steepest fall in Railtrack's share price was when the City was led to believe that the Government was interviewing members of the Railtrack board to decide who was in and who was out, ' says Winsor. If Railtrack is to raise more money, it must be able to keep its share price at a respectable level, he says.

One of the major areas where Railtrack can boost its share price is by delivery of major projects. So far, its record in this has been 'questionable', he says.

Indeed, the second highest fall in the track operator's share price was when Railtrack announced spiralling costs on the West Coast Main Line upgrade.

He says that the influence of large US programme management companies on Railtrack's major projects is significant, though the only way Railtrack can prove that it can cope with the large contracts is by delivery.

But despite 'Railtrack throwing the network into considerable disruption and crisis, ' Winsor has no regrets in taking on the regulator's job.

He says with 'proactive, proportional and fair use of powers I can make the greatest positive possible contribution to the network'.

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