Editor's Comment


What to do, when to do it

Source: RTM Oct/Nov 2015

The Hendy report had not been published as RTM went to press, though its doubtlessly radical contents were being foreshadowed everywhere.

The grilling given to Mark Carne, Philip Rutnam and Richard Price by the House of Commons Public Accounts Committee (PAC) exposed some frankly frightening escalations in project costs. These were backed up by the Office of Rail and Road’s recent financial and efficiency report for 2014-15, which includes this revealing sentence: “We have only completed Enhancements Cost Adjustment Mechanism reviews on some 50% of the current portfolio, but the efficient funding we have determined already adds up to about 80% of the total assumed in the determination.”

Those figures make clear the scale of the overspend/underestimate, and thus the likely scale of Sir Peter’s enhancements shake-up. Although the Midland Main Line and TransPennine electrification projects have indeed been ‘unpaused’, neither is really a CP5 project any more. Expect to see many other projects slip to CP6 and beyond.

Of course, Hendy is not the only game in town – other reviews into Network Rail are going on concurrently. Some improvements are no doubt necessary, but it would be hard to see the wisdom of embarking on a wide-scale, disruptive restructure or reform of the organisation at this critical point. Far better to do as Anthony Smith recommends on page 6, and give Hendy and the rest of the board some breathing room – so, a few years to turn things around. If more serious changes are required, they should be done during the transition from one control period to another.

The government clearly recognises the value of rail, and the need for capital infrastructure spending. But with increased focus on Network Rail, especially since its significant debts became a public balance sheet issue, more attention from the hawks at the Treasury is inevitable. The rail sector cannot afford to lose the confidence of the government in its ability to deliver upgrades that are good value for money.

Carne, speaking to the hostile MPs at the PAC, made the point that the people lauded for projects like Dawlish and Reading are the same ones being castigated over Great Western electrification’s costs and slipping timescales. It’s not as simple as ‘heads must roll’. Network Rail is capable of great things, and has often achieved them – though its cost estimations have proven not just optimistic but wildly inaccurate for some projects. Far too little attention was paid to issues like access, stakeholder management, ground conditions, standards, integration, and so on. 

Now we must wait for Sir Peter’s conclusions!

Adam Hewitt



Lutz   21/11/2015 at 13:00

Nine months should be more than sufficient to establish a program to address the issues, with substantive remedy demonstrable within the first 12 months. Then we can start to look at the break out of units for privatisation.

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