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19.07.17

RIA: Future of rail renewals work in jeopardy following poor CP5

Downturns in renewals works at the end of CP5 and a lack of enhancement development work for CP6 pose a “significant threat” to future works for the UK rail sector and its supply chain, the Rail Industry Association (RIA) has warned.

Following a poor renewals period in CP5, which saw costs to Network Rail soar, a leading figure from RIA has claimed that there could be a slowdown in future construction work going into the future.

Back in May, RTM also reported that struggling firm Carillion was planning job losses due to renewal cutbacks from NR starting to have an impact.

“The downturn in renewals volumes at the end of CP5 and the lack of enhancement development work for CP6 clearly pose a significant threat to the forward programme of work for the UK railway network and its supply chain,” Peter Looseley, policy director of RIA, told the All Party Parliamentary Rail Group (APPRG) yesterday evening.

Loosley also argued that CP6 enhancement development activity was “worryingly low”, suggesting that the downturn could last into CP6 even if the settlement restores volumes to pre-downturn levels.

The RIA director explained that data provided in December 2016 had showed a dramatic £1bn fall off in maintenance work, particularly towards the end of CP5.

He added that feedback from RIA members suggested that the position of renewals work was likely to worsen further, or is worsening already.

“If nothing is done to remedy the shortfall both in volumes of work at the end of CP5 and the lack of GRIP 1-3 development work to pump-prime CP6, the supply chain will further contract and then later need to expand to meet the next bow wave of work – if the necessary resources are available – almost certainly at extra cost,” he continued.

“The supply chain will also become less productive precisely at a time when increasing efficiency is vital. Small and specialist companies are particularly vulnerable and some may not survive in the current stop/go environment.”

Other issues highlighted by Loosley in his speech to Parliament included a reduced confidence from businesses to invest, reduced staff levels and a detrimental impact on SMEs and specialist contracts in the supply chain.

“Supply chains will have to ramp up staffing levels when deferred work comes to market, assuming the required resource is available – and at a reasonable cost,” he explained.

“This peak and trough workload is therefore a very inefficient way of working especially given the work has been identified as needed and, as RIA has said in the response to the recent Industrial Strategy Green Paper, this compromises productivity and can add between 10-30% to costs as mentioned earlier.”

A spokesperson for Network Rail told RTM: "Network Rail continues to heavily invest in Britain's railways with spend on renewals growing this year, compared to last.

"Budgets are constantly under review to ensure we maximise the value from every pound spent.

"As a result, some non-essential renewals work is being postponed and the money diverted into areas that will have more direct impact for passengers - at improving train performance or helping to fund projects that expand and improve the railway."

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Comments

Simon Eames1990   19/07/2017 at 22:36

As HS2 gets more green lights, rail infrastructure works gets more red lights. It's not just HS2 that I blame by taking the money, NR keeps being overconfident and not carefully measuring the costs. If HS2 wans't approved there still will be delays to infrastructure work but not halted by years.

Keith   21/07/2017 at 14:30

Trouble is Contractors are tendering low to win the work as NR always award to lowest bidder in line with the government requirements then slamming Network Rail for variations and additional surveys and works to get the money back but the tender price is the allocated funds so when they screw NR they are also screwing themselves !!

Mr C F Burton   13/02/2018 at 13:22

I certainly hope that given the Possession Order compensations payable, NR should strive to do as much renewal work as is possible when a lengthy stretch of route has to be closed. Compensation payments are wasted money so far as the passenger is concened.

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