27.10.16
Minister presses Hendy to devolve Network Rail in Scotland amid budget issues
The Scottish government has demanded that Network Rail in Scotland be devolved after an independent report criticised it for allowing crucial improvement projects to go over budget.
As of July 2016, the cost of the five Scottish rail upgrade projects – the Aberdeen to Inverness Improvement Project, the Highland Mainline Improvement Project, the Edinburgh to Glasgow Improvement Programme, the Shotts electrification and the Stirling, Dunblane and Alloa electrification – had increased from £1.1bn to £1.5bn.
The report, commissioned by Transport Scotland, said this showed the “unreliability” of Network Rail’s original cost estimates, raising concerns about Transport Scotland’s funding of the projects.
Hamza Yousaf, the Scottish transport minister, said: “Scottish ministers and indeed passengers up and down the country quite rightly have high expectations of our railway. At the heart of our £5bn programme of improvements is an underlying need to provide best value for the public purse while delivering a first class service.
“This service has clearly not been delivered and that is why the Scottish Government rejected initial projected cost increases and schedule revisions from Network Rail.
“We know passengers are already frustrated, not least as this review comes hot on the heels of the need for ScotRail to implement a Performance Improvement Plan – something we are closely monitoring. While we are doing what we can to address the issues at hand, our powers are limited.
“That is why I have made clear to Network Rail’s chair, Sir Peter Hendy, and chief executive Mark Carne, my expectation that they will increase the scale and pace of their decentralisation agenda. As a minimum I expect this to include the full transfer of responsibilities for the development, design and delivery of infrastructure projects to their Scotland route.”
Yousaf said he would also continue to press the issue of rail devolution with Paul Maynard, the UK rail minister.
The report also argued that Network Rail had no dedicated project controls system to analyse risk, did not follow robust project schedules, and had not always promptly reported cost increases to Transport Scotland.
It found that planning project spending was made more difficult because control periods are not tied to the passenger franchising process.
Network Rail, Transport Scotland and the ORR also had “inconsistent frameworks” for governing projects. The reclassification of Network Rail as a public sector body had increased Transport Scotland’s liability, leading the report to say a stricter governance framework was needed.
A number of recommendations were laid out for improvements. For example, Network Rail should implement a project controls improvement initiative and strengthen its commitment to providing early and accurate cost forecasts.
In addition, the report said Transport Scotland should update its Major Rail Projects governance framework to be portfolio-wide, review its process for defining and approving commercial strategy for future projects, and review the appropriateness of its early development process and project estimation.
RTM contacted Network Rail for a comment, but it did not respond at the time of publication.
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