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18.09.15

NR civils renewals plan for 2016-19 fails to get ORR approval

Network Rail’s civils renewals programme for the last three years of CP5 has failed to win approval from the Office of Rail & Road (ORR) because the evidence provided "was not sufficient". 

A National Audit Office (NAO) memo, given as evidence to the Commons Public Accounts Committee’s inquiry into Network Rail’s 2014-19 investment programme, notes that at the time of the Final Determination in October 2013, the ORR felt Network Rail had not explained why it was necessary to carry out so much more civils renewals work than in CP4. 

To give Network Rail more time to make its case, a new Civils Adjustment Mechanism was designed to allow scrutiny of the amount of work and cost at a later date. The work was due to be complete this month. However, the NAO memo says that the ORR has told Network Rail that the evidence it has provided “was not sufficient” to do this work. 

The ORR expected the civils asset management plan for 2016-17 to 2018-19 to include expenditure on civils assets, including: 

  • underbridges
  • overbridges
  • tunnels
  • major structures
  • culverts
  • retaining walls
  • footbridges
  • coastal, estuarine and river defences
  • ancillaries
  • cuttings
  • embankments
  • natural slopes
  • ancient mine workings
  • shallow mines
  • deep mines
  • track drainage (surface and groundwater)
  • earthworks drainage (surface and groundwater)
  • third party drainage (surface and groundwater)
  • tunnels drainage (groundwater) 

The ORR needs sufficient evidence to show why individual schemes are included in the workbank, and any prioritisation that has been undertaken in the selection process, both at route level, and if required, at national level. 

The ORR had planned to publish a draft decision by 30 June 2015, and a final decision by 30 September 2015. 

But in a letter in May to Paul Plummer, Network Rail’s group strategy director, the ORR’s Alan Price wrote: “[W]hile you are confident that Network Rail ‘can demonstrate what work we need to do, where it needs to be done, and what it will achieve’, you acknowledge that ‘there is still a wide range of uncertainty around how much our plans will cost’. You then state that ‘it may not be appropriate for [ORR] to make a final decision about the efficient level of spend for CP5 as a whole at this stage’, and that ‘it may be more appropriate for us [by which I assume you mean ORR and Network Rail working together] to reach a final conclusion this summer only in relation to the next financial year’.” 

Price’s letter to Network Rail continued: “Given this acknowledged degree of cost uncertainty, together with your recognition that further work and an updated submission is needed, I cannot consider that your submission is compliant with the requirements of the Notice. It does not enable ORR to form a judgement on both the volumes and efficient costs of the work for the remainder of CP5. 

“The Notice set out our intention to publish our draft decision by 30 June 2015 and our final decision by 30 September 2015. This is clearly now no longer possible.” 

Network Rail board minutes from June show that Plummer asked for the board’s agreement to formally submit the business plan for 2015-16 and the balance of CP5 to the DfT and to ORR. That required the board to be happy with and to sign off on “the proposed renewals deferral and the additional funds needed for Civils under the Civils Adjustment Mechanism”. 

UPDATE

A Network Rail spokesperson told RTM: “The terms of reference for the Hendy review include reviewing the core business at the same time, as enhancements cannot be considered in isolation. 

“The Department for Transport will look to the Office of Rail and Road to provide an assessment of this work.  Therefore, as part of this, we are reviewing civils renewals which will incorporate further development of the plans included in our CAM submission. Following conclusion of the Hendy review later in the autumn, we expect to update our Delivery Plan in the first quarter of 2016.”

Comments

Lutz   19/09/2015 at 13:10

Utterly dreadful. There needs to be a significant refresh of human resources at all levels in NR to get it back on track.

Jeds   21/09/2015 at 14:13

How much of this work is due to adherence to Standards that were introduced after privatisation, because private contractors had to be held to best, not money making short cuts? British Rail (remember them) had the skills and knowledge to inspect and understand risks, and develop practical engineering solutions. This has been lost in today's railway. Taking site works away from inhouse engineers and putting them in the hands of contractors project managers has had a strong influence on assessment of need and the costs of doing the work.

Rupert Le Bere   22/09/2015 at 13:29

Hear hear to Jed's comments. You could say 'I told you so' but whilst that would have been completely non-PC at one time, maybe the ORR has finally listened to the grass root critics. Contractors Project Managers have a role, but not at dictating project planning.

Gabriel Oaks   23/09/2015 at 07:54

It is reassuring to see our regulator (ORR) is doing its job by challenging NRIL rather than giving a simple nod of approval....

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