Latest Rail News

14.02.17

Carne floats supplier incentive scheme for capacity improvements

Rail contractors could soon be paid cash returns according to how much they are willing to invest in the network, with plans currently on the table potentially reviving elements of the public-private partnership schemes that existed under Tony Blair’s government.

Network Rail boss Mark Carne revealed that discussions are currently ongoing to explore the best possible route to incentivise contractors to invest in the network by paying them according to how much capacity they can open up.

For example, contractors offering signalling systems as part of the Digital Railway programme could earn payments for boosting capacity on currently congested lines. Carne said these returns would likely depend on how much their investment impacted timetables.

Under the plans, which are still in their infancy, it is also possible that Network Rail could work alongside ROSCOs on some investments.

But it is as yet unclear whether the financial return would come from the infrastructure owner itself or the private operators, which would also be benefitting from running more trains on their routes.

RTM understands that Network Rail is already speaking to contractors directly, with many willing to “put their money where their mouth is” and invest in new signalling equipment that could significantly boost capacity by an estimated 40%.

“They say: we’re willing to invest, but we have to make a return,” Carne told the Financial Times. “We’re exploring how to make that work.

“I don’t think Network Rail should be specifying how to create this capacity. I think we should be saying: how do you think we should be creating this capacity? We should be saying: how does the market think we should be creating this capacity?”

The CEO of the infrastructure owner has always been an outspoken supporter for “running Network Rail like a business”, although he guarantees that lessons have been learned from the Railtrack days.

“We will always retain the position of being a knowledgeable buyer of services and certain core activities will still be a Network Rail task,” Carne argued.

(Image: c. Network Rail)

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Comments

Dom Greenop   14/02/2017 at 12:41

Create as much "extra capacity" as you like by running trains closer together (signalling) and packing more people into a confined space (trains), but unless more tracks are laid or relaid (legacy of the rationalisation from the 50's), you will simply not be able to run more trains. A very basic principle which the whole industry is trying to ignore.

Pwt   14/02/2017 at 12:58

This is an industry issue, not one just for the signalling contractors to address. The so called Digital Railway initiative requires considerable investment on the part of the providers of rolling stock as well as the TOCs. Some joined up thinking needed here me thinks!

Jerry Alderson   15/02/2017 at 01:44

Carne: "[Network Rail] will always retain the position of being a knowledgeable buyer of services." Well, Railtrack certainly wasn't and that was a key reason why it collapsed - and I write that as a Railtrack shareholder who lost a sleeve or two though not my whole shirt. Transport for London has shown that is 'a knowledgeable buyer of services' and that is why London Overground has been a success, in my opinion.

Noam Bleicher   15/02/2017 at 10:27

This sounds like a nice idea in principle, but in practice it will just introduce another interface into the already over-complicated web of interfaces in our balkanised system. Let's say contractor X invests in a new signalling system which increases capacity by 2 tph. The TOC[s] or NR pay X a fee to give them a return on their investment. The system turns out to provide the extra paths at a cost of increased delays - who does the TOC go to, to claim compensation? NR? Contractor X? Who decides compensation levels? I can see lawyers doing very well out of it.

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