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What does the future hold for the relationship between Network Rail and HS2?

Mark Cowlard, partner and head of rail at built asset consultancy EC Harris, explores the future options for integration, shared governance and strategic partnership between the companies.

The development of HS2 will have a significant impact on the UK rail industry and there is already much industry speculation as to the role Network Rail will play in the development of the programme.

The company is already supporting the roll-out of HS2, specifically around the Crewe extension and Euston station, and it is not a coincidence that both the chairman and CEO of HS2 both hail from careers at Network Rail. We are sure to see others from the business joining them in the future, and in doing so sharing best practice and network knowledge to deliver the programme effectively.

As the parliamentary process progresses, focus will turn to the implementation plan for phase 1, with the accelerated development of phase 2 following soon after. Once Simon Kirby settles into his new role as CEO Delivery, his immediate priority will be to oversee this implementation.

The resource challenge

Projects like HS2 and Crossrail will set the UK apart as a world leader in rail technology and delivery, and will present an unparalleled opportunity for the development of new skills and supply chains. However, we must avoid a situation where a skills shortage places a constraint upon the delivery of either.

The spending outlook with Network Rail is currently at its highest, and prospects beyond CP5 look promising too. The answer to this has to lie in an integration or alliance between HS2 and Network Rail.

Railway engineers and other professionals will want to be involved in HS2 in some form, and the industry needs to consider how it can elevate the existing skills and supplier relationships already established through Network Rail to ensure delivery must be given.

It is likely that phase 1, with the exception of areas such as Euston station, can largely be delivered independently. It is through the development and implementation of phase 2 (possibly with a greater overlap to phase 1 than originally thought in response to the need to accelerate) that both organisations will need to manage together priorities, staffing and resources – both human and material – to avoid the perfect storm where excessive industry inflation could be created.

Oversight

Since HS2 will in part operate on the classical railway there is a need for careful systems integration and assurance. It is critical from the outset that an oversight body is created, influencing both Network Rail and HS2 to guide the technical integration decision-making and development process, to ensure the right outcomes are delivered for the longer term whole railway.

It is a known intention of HS2 to not seek external investment to deliver the railway. However, if a potential sell-off, post-operational commencement, was to be achieved as with HS1, then a railway which is efficient to run, with high levels of infrastructure resilience, will be critical in realising maximum value from the railway. This oversight body could ensure this is developed and aligned with operational standards and integration of systems with Network Rail’s classic railway.

Integrated budgeting

If together HS2 and Network Rail align with resourcing plans and strategies, think commonly about supply chain management, about delivery methods, standards, and assurance of the systems and their integration, then should they also think about budget cycles and financial planning too? This is not something that is new.

The role of infrastructure provider to Crossrail that Network Rail is currently providing for the ‘on networks’ element is very similar. Of the overall spend of circa £15.9bn, Network Rail is delivering nearly £3bn of this on behalf of Crossrail. This is scope that is being delivered on parts of the route that are either very close to or on the existing network, possibly not dissimilar to the whole of phase 2. I can foresee that CP6 will contain scope, where funding comes not from the ORR, but instead from HS2 to deliver where HS2 interfaces very closely with the existing network.

Mark Cowlard is a Partner at EC Harris and head of its Rail Sector team. He was formerly the managing director of Atkins' Rail Solutions business.

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