01.05.14
A great future for the rail supply chain in Derby – DDRF conference 2014
Adam Hewitt reports from the annual Derby & Derbyshire Rail Forum conference, which attracted some of the biggest names in the industry from the DfT, Network Rail, the operators and the supply chain.
Leading figures from across the industry addressed ‘the challenge of CP5’ at the Derby & Derbyshire Rail Forum (DDRF) annual conference, while Network Rail finance director Patrick Butcher revealed more about the ongoing changes at the company.
Butcher was joined by other key leaders including transport secretary Patrick McLoughlin; the DfT’s director general of the new Rail Executive, Clare Moriarty; Stagecoach chief executive and Rail Delivery Group (RDG) chairman Martin Griffiths; RDG director general Michael Roberts; Rail Freight Group executive director Maggie Simpson; and Carillion’s Paul Paddick.
The conference on 10 April was preceded by a dinner, addressed by shadow transport minister Lilian Greenwood MP, who was supportive of HS2 in her speech.
HS2 was also a big part of McLoughlin’s speech, as it has been at most of his public events since taking up his post 18 months ago. He also said there was “tangible evidence” that his government’s growth policies had helped the rail supply chain in Derby, and discussed training and skills in the rail industry.
Rail Executive
Moriarty explained more about the changes at the DfT, the formation of the Rail Executive from 1 April (an “evolution, not a radical change”, she said) and the new people running franchising. But she explained that it is currently relying for 50% of its 100-120 staff on limited-term contracts and secondments from the wider industry. She said a managing director is soon to be recruited for
the new Office of Rail Passenger Services (ORPS) within the Rail Executive, to be launched in the autumn to handle franchise delivery and management.
Setting the context of rail’s recent growth – and the capacity challenges this has created – she also discussed the new Rail Supply
Group, helping supply chain businesses grow and export.
Network Rail – spending but also cuts
Many of the speakers discussed the £38bn investment programme for CP5 in renewals, maintenance, enhancements and upgrades, as covered in detail previously in RTM.
But Patrick Butcher said there were “misconceptions” that Network Rail – now reclassified as part of the public sector – had a “hosepipe of cash” coming in. In fact, it has just cut the number of management-grade jobs by 15%.
He explained: “We’re supposed to have lots more money. It doesn’t feel like that, I can tell you; we’ve just done a 15% staff reduction across all the management grades at Network Rail. 1,100 people have left the company over the last couple of months, and some will go over the next couple of months. It doesn’t feel like [there’s] a great big hosepipe of cash pouring into the company.”
When the management-grade job cuts were originally announced in September 2013, the TSSA union said it was in “shock” at the scale of the cuts and their possible impact, “in particular the effect on safety and on the workload of those who may be left behind”. It opposed compulsory redundancies.
A ‘golden age’?
Discussing the efficiency agenda, Butcher said: “We took 15% [of costs] out during CP4, a bit less than we meant to, largely because of problems we had with track renewals, and those problems will continue into CP5. The impact of that should come through in reduced subsidy.
“This has got to be a grown-up debate. There is no hiding from the choice that if you put money into the railway and you expect the railway to fund the interest costs of the investment that has gone in, costs are still going to go up or stay flat.”
He spoke of a “golden age of rail investment”, but hinted that there would be “funding crunches” to come in the next decade.
Site supervision overhaul
Butcher also gave more details about the upcoming changes to site supervision, in which site safety and project supervision will be rolled into one post. RTM has covered these changes before, but Butcher confirmed the changes are coming in towards the end of this year. As Steve Hooker and Simon Kirby have noted in RTM, the current structure can mean situations where there is “someone from potentially the second or third tier running safety…Are they really going to feel accountable to stop the job when the person they’re trying to stop will decide whether they’ve got a job again next week?”
Butcher focused on the absolute commitment to safety, and the fact that the railways remain far behind the oil and gas sector – in other ways a comparable industry – when it comes to workforce safety, which has flatlined recently after big advances in Network Rail’s early years.
He said the company’s vision is that no-one ever feels forced to make a choice between doing a job safely and doing it on time, and the ‘obligation’ (not right) to intervene if someone thinks something potentially unsafe is happening.
He said Network Rail managed to close more level crossings than it expected during CP4, adding: “The only safe level crossing is a closed level crossing.”
He revealed that he keeps a photo in his office of 14-year-old Olivia Bazlinton, who died in 2005 at Elsenham level crossing in Essex, as a constant reminder of the human consequences of safety failures.
Talking about some of the individual projects for Control Period 5, he said that Great Western electrification “is the biggest and most complex thing we’ve done…it makes the West Coast Main Line look like a relatively straightforward line upgrade”.
Timetables will also need completely re-doing, he added, particularly Southern. The current timetables “don’t work” he said, and are impossible to fulfil.
Freight – rising to the challenge
Maggie Simpson of the Rail Freight Group described the trends in freight movements – movements of coal are up more than 9%, as are construction-related goods (more than 12%) and Network Rail’s own materials (almost 6%), while intermodal freight dropped slightly year-on-year by about 2% for a variety of reasons.
Delays caused by Network Rail have been above the benchmark for almost all of CP4, she added, which isn’t good enough, and she said the freight industry will rise to the challenge set by the HS2 Growth Taskforce of explaining how it will make best use of the classic network capacity freed up by HS2.
There are five key CP5 projects in England and Wales that will help rail freight’s growth, she said: Felixstowe to Nuneaton phase two; Southampton to WCML capacity; GWML gauge enhancement; Northern ports and Trans-Pennine freight capability; and West Anglia gauge clearance.
She warned that while rail investment is up, road investment is about to jump too, to £3bn on major roads per year by 2020.
Business opportunities from electrification
Paul Paddick discussed Carillion’s work and the challenges of Midland Main Line (MML) electrification, which it is delivering as part of the Carillion Powerlines venture under the National Electrification Programme (more on page 166).
There are about 120 route miles (195km) to electrify, but 621 single track kilometres, with 24 distribution sites and four new grid points. The work is being delivered section by section: Borehamwood to Bedford; Bedford to Kettering North; Kettering North to Corby (by 2017); Kettering to Leicester; Leicester to Nottingham (by 2019); Trent South to Derby (by 2019); Derby to Chesterfield; and finally Chesterfield to Sheffield.
The expertise and products of SMEs will be much in demand he said, since the tier 1 and 2 contractors are going to need foundations (steel and concrete), small steel components and bracketry, conductor wire and HV cabling, electrical and telecoms support, fabricated main support steel, insulators and isolators, signage, and small-scale civils work.
Success story
Martin Griffiths gave a more light-hearted speech, in which he noted that the Network Rail alliance with Stagecoach’s South West Trains franchise had achieved some real successes, though had failures and things to learn from too. He said the industry had to be confident and sell itself as a success story, which it truly has been over the last 20 years. He picked that time period – it has been two decades since privatisation – deliberately, praising the achievements of private train operators, saying the unions’ constant talk of vast profits and under-investment were “myths”. He added: “Those who seek change purely for ideological reasons need to be careful what they wish for.”
The RDG’s Michael Roberts also praised the private side of the industry, and the new trend for alliancing. He explained the RDG’s role and formation, and recent changes to strengthen its executive functions, as well as its poster campaign to boost the status of UK rail.
The speakers all praised Derby’s status as a railway hub, and many attendees wore ‘Derby 175’ badges, marking the campaign and year of events being held to celebrate Derby’s 175 years as a railway city.
But it also looks to the future and the coming decades, with McLoughlin noting that Bombardier’s success in winning the Crossrail rolling stock procurement contract “in open competition” will benefit the city and the railway supply chain within it for years to come.
After the event, Colin Walton, DDRF chair, told RTM: “We thank the Secretary of State, Clare Moriarty and other leaders of our industry for taking the time to come to Derby to celebrate our future. As the world’s largest cluster of rail businesses we have much to contribute to tomorrow’s railway, both at home and abroad – a contribution that was acknowledged by speakers from DfT, Network Rail, the Rail Delivery Group, Rail Freight Group and private sector operators.
“The DDRF rail supply chain is up for the challenge – our message is: We are open for business – how can we do business with you?”