HS2

NR routes to publish ‘pipeline’ of third party opportunities by year end

A number of major reforms, including the publication of a ‘pipeline’ of opportunities for third parties by Network Rail’s routes by the end of the year, have been announced to enable companies in the private sector to be more directly involved in major infrastructure projects.

The changes will allow companies in the supply chain to directly work on railway projects and compete for lucrative contracts with NR.

Included in the reforms is the publication of a regular pipeline of third-party project opportunities, as well as the creation of a clear service level agreement for third parties to give them clarity and reassurance regarding NR’s legal obligations.

NR has also introduced flexibility to railway standards to encourage innovation and reduce costs, along with a rewards scheme where money saved from introducing a new idea or innovation is shared between NR and the private sector company.

“A growing railway drives the economy, jobs and housing and by welcoming open competition into the core of our business we will increase the pace of innovation, creativity and efficiency and could deliver even more improvements to our railway and for the people that use and rely on it every day,” said Mark Carne, chief executive of NR.

“I am determined to create an environment where innovative third-party companies can compete for and directly deliver railway projects,” he added. “These reforms mark the next stage of Network Rail’s transformation having already decentralised into nine devolved individual businesses.”

Back in December 2016, NR commissioned the Hansford review into how to encourage competition into railway projects and attract more private sector involvement to fund and finance Britain's railway projects. This has been published today.

By the end of this year, NR’s routes will publish ‘pipelines’ of projects that they want to put out to market. The infrastructure owner will also be working with government on producing a list of third-party opportunities. Initially these opportunities may be at the smaller end of the spectrum such as new stations, depots and car parks.

One of NR’s devolved routes, Anglia route, will lead a trial of these reforms in the autumn, with the aim of rolling them out across the country in spring 2018.

NR stated: “We know there is considerable private sector appetite to invest in long life secure assets such as railways. As there are complexities in ensuring these are financially viable for both government and investors, we are establishing a dedicated team (to be in place by December 2017) to identify suitable opportunities.

“As the Hansford Review identified, there is currently a lack of visibility for potential investors of the opportunities available to them. As with the Network Rail funded project pipeline mentioned above, we will also publish a regular pipeline of potential projects at a national level. When we have established that third party development is the best way forward, and included projects in this pipeline, we will not compete for them ourselves.”

And Darren Caplan, chief executive of the Railway Industry Association, said: “We are excited by the opportunities we see to innovate with these reforms.  

“We all know that the industry has to change – these changes mark a welcome, positive, approach from Network Rail which has previously resisted such radical steps.”

Sir John Armitt, deputy chairman of the National Infrastructure Commission, also stated: “Record numbers of people are choosing to travel by train, and Network Rail is in the midst of a huge programme of renewals and enhancements to the network, alongside working on major schemes such as East-West Rail and HS2.

“I welcome these measures, which will help drive innovation and bring new competition and the latest technologies into the industry, to deliver better services for passengers.”

One example of a major infrastructure project already being financed and led by the private sector is with company Resonate, who are delivering an innovative traffic management system called Luminate.

Top Image: Sean Penny

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