Latest Rail News

07.08.15

Exclusive: Project delivery problems 'systemic' at Network Rail – ORR

Weaknesses in Network Rail’s project development and delivery are “systemic” and the infrastructure owner may be in breach of its licence as regards the delivery of its enhancement programmes, according to the Office of Rail and Road (ORR). 

In a letter sent to NR, the DfT and Transport Scotland, Alan Price, the ORR’s director of railway planning and performance, outlined the preliminary findings of the regulator’s investigation into whether NR had “done everything reasonably practicable to meet its licence obligations in relation to achieving its regulated outputs for CP5”. 

He said: “Having carried out this work, our preliminary view is that NR may not have done, and is not doing, everything reasonably practicable to comply with condition 1 of its network licence in relation to the delivery of its enhancements programme.” 

Price highlighted that given the early life-cycle status of much of the CP5 portfolio the ORR could not expect NR to set completion milestones, however the regulator’s focus on the timely delivery of GRIP 3 gives an “early indication of the level of stress in the programme”.

He added that NR missed 16 of 44 (36%) GRIP 3 regulated outputs and 14 out of 40 (35%) GRIP 6 regulated outputs in 2014-15. These 30 missed milestones were on projects that vary by size, type, location and complexity. 

ORR and NR analysis has thrown up some particular weaknesses: 

  • Poor setting of project requirements (front-end definition) with inadequate change control against a baseline;
  • Inadequate governance and challenge of projects as they pass through development gateways;
  • Inconsistent consideration of safety issues during design and optioneering;
  • The accountabilities of the client, sponsor and deliverer are blurred, as projects move through their lifecycle;
  • Cost estimation and risk functions are not adequately resourced or governed through the early project lifecycle;
  • No defined framework, tools and techniques for managing complex infrastructure programmes resulting in underestimates of timescales, costs and impact on operational performance;
  • Absence of portfolio management capability to validate project reporting in terms of cost and schedule, for example by peer reviewing and challenging projects to provide early warning of failure or by better identification of shortages in critical resources;
  • Late requirements identified when handing asset over to operator;
  • Land and consents issues underestimated;
  • Unknown asset condition, resulting in late increases to scope and replanning;
  • Productivity is lower than planned;
  • Weak assurance of compliance with safety legislation and standards;
  • Inadequate and late technical files for authorisation under interoperability regulations. 

Price said: “We consider that the wide range of identified weaknesses indicates that NR's project development and delivery weaknesses are systemic, rather than the result of individual project failings or adverse circumstances. This is also evidenced by the wide range of causes and the scale of the required long-term improvements that NR needs to develop and embed into its business.” 

He added that NR’s response to the regulator’s concerns had been “slow, localised and patchy”, but began to be properly coordinated in February 2015 by the initiation of a review led by one of NR’s non-executive directors – Malcolm Brinded – who now chairs a specially convened task force known as the Major Projects Delivery Committee (MPDC). 

Price noted that during the course of the investigation, NR has presented several iterations of its Enhancements Improvement Plan (EIP). The EIP has been produced under the auspices of the MPDC and is designed to draw together a range of cross-NR actions to improve its capability and address ORR’s concerns. 

However, at the time of the ORR’s assessment, the EIP still had “omissions” and “underdeveloped actions”, particularly NR’s authorisation submissions, its approach to improving on ‘safety by design’ and its ability to manage major infrastructure programmes with timetable performance risks. 

The ORR also noted that it has “not seen clear analysis” of the causes of missed milestones with a link to the associated actions in its plan. 

“We therefore do not have complete confidence that NR has yet identified every issue,” said Price. “On the basis of our findings, we cannot be satisfied that NR is doing everything reasonably practicable to achieve its regulated outputs, until: the EIP is sufficiently finalised; and there is evidence of improvement following effective implementation of the finalised EIP.” 

NR has been invited to make further representations to the ORR by 1 September 2015, after which the ORR will decide whether a licence breach has taken place. This is likely to be at the ORR board’s next meeting in September. 

Responding to the letter in a statement sent to RTM, Francis Paonessa, managing director infrastructure projects at NR, said: “Since 2009, Network Rail has successfully delivered over 5,000 projects worth more than £15bn. The projects set before us for our current five-year funding period to 2019 were bigger and more complex than ever and required a step-change in delivery – both for the company and its supply chain. 

“Despite this challenge, over three-quarters of our regulatory project milestones have been delivered to time or within weeks of target. But we know we can and must do better which is why, earlier this year, we set up a special Board-led task force to strengthen our major project delivery. The task force has produced a detailed improvement plan that is already underway and good progress is being made.”

A DfT spokesperson added that it is “entirely right” that the regulator should hold Network Rail to account through this ongoing investigation. “As we have previously announced, the secretary of state has asked Dame Colette Bowe to look at the lessons learned from Network Rail’s enhancements programme and she will report back in the autumn.”

(Image: c. Stefan Rousseau)

Comments

Wimg   07/08/2015 at 12:18

What an impressive report ! Public Company Network Rail is now filleted to the bare bones , Mr McLoughlin has something to mesmerize .. Talking about rules and regulations ... , at least it's not the European Union here to put the blame on

Lutz   07/08/2015 at 20:41

This has all been evident for some time, but I have never heard of a committee being an appropriate response. What is NR going to to ensure it has the people with the right skills, and what is it going to do with the current bunch of under performers?

Add your comment

 

related

rail technology magazine tv

more videos >

latest rail news

Scrap HS2 and use its £56bn budget to fund 28 alternative projects, urges TPA

14/05/2019Scrap HS2 and use its £56bn budget to fund 28 alternative projects, urges TPA

Scrapping the £56bn HS2 project could pave the way for 28 separate local infrastructure schemes to be funded instead with the case “g... more >
DfT calls for new technology to transform transport accessibility, but union warns against ‘faceless’ railway

14/05/2019DfT calls for new technology to transform transport accessibility, but union warns against ‘faceless’ railway

The DfT has called for new technologies to revolutionise travel for older people and those with disabilities, but the RMT has “reacted with... more >
First leg of HS2 ‘passing the point of no return’ due to amount of money already invested, says NAO head

13/05/2019First leg of HS2 ‘passing the point of no return’ due to amount of money already invested, says NAO head

HS2 is on the “verge of passing the point of no return” and the amount of money spent would make scrapping the flagship project &ldqu... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

rail industry focus

View all News

interviews

Advancing the rail industry with management degree apprenticeships

08/05/2019Advancing the rail industry with management degree apprenticeships

In answering the pressing questions of how current and future generations of managers can provide solutions to high-profile infrastructure projec... more >
Women in rail - is the industry on the right track?

12/03/2019Women in rail - is the industry on the right track?

RTM sits down with Samantha Smith, sole female member of the TransPennine Route Upgrade Alliance Leadership Team, to find out more about encourag... more >
TfN Strategic Transport Plan: not just for transport's sake

22/01/2019TfN Strategic Transport Plan: not just for transport's sake

Peter Molyneux, Transport for the North’s (TfN’s) strategic roads director, has been leading on the development of the seven economic... more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. ... more > more last word articles >

'the sleepers' daily blog

Making the railways safer and more reliable with Ze-Power

13/05/2019Making the railways safer and more reliable with Ze-Power

Professor Meiling Zhu, chair of mechanical engineering and head of the Energy Harvesting Research Group (EHRG) at the University of Exeter, intro... more >
read more blog posts from 'the sleeper' >

comment

The railway franchising model is broken, and passengers are paying the price

13/05/2019The railway franchising model is broken, and passengers are paying the price

Meg Hillier, MP for Hackney South and Shoreditch and chair of the Public Accounts Committee (PAC), gives her view on the state of the UK’s ... more >
NSAR: Tackling the digital skills shortage

13/05/2019NSAR: Tackling the digital skills shortage

The National Skills Academy for Rail (NSAR) chief executive Neil Robertson returns to write for RTM, this time, to assess the digital skills shor... more >
Delivering cost-effective electrification

13/05/2019Delivering cost-effective electrification

David Clarke, technical director of the Railway Industry Association (RIA), sets out the findings of a new report on how rail electrification can... more >
5G: An opportunity to revolutionise on-train connectivity

13/05/20195G: An opportunity to revolutionise on-train connectivity

Simon Holmes, group head of digital (engineering) at FirstGroup, introduces us to the 5G solution being delivered for the rail sector.  ... more >