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Limited cash means EWR-style alliance models ‘have to work’

There is no doubt that delivering projects using deep alliances between contractors and suppliers, similar to what will be trialled with East West Rail, produces better results, rail bosses have resoundingly argued.

Chris Curtis, head of Crossrail 2 at Network Rail, said that in the schemes he’s been involved in over the last 20 years, there is “no doubt that where we work closer together it results in more successful projects”.

“Yes, there are some that challenge that rule, if you’d like, but generally those that formed an alliance have delivered well,” he told delegates participating in yesterday’s Platform session at Railtex 2017. “The early involvement of contractors in the early stages of projects clearly helps with that.

“The thing for me is, franchisees – trains operators – don’t have lots of capital, and therefore, using the mortgage example, they can only repay the mortgage for a certain amount of time. So these innovative ways of working have got to work.”

From a Network Rail perspective, he added, the infrastructure owner just wants to see the network developed, but is aware that they won’t get all the money needed – thus meaning these alliances are imperative working models to the successful and cost-effective delivery of projects.

David Hoggarth, director of Rail North, agreed with Curtis, revealing that although nothing is ready to go just yet, similar opportunities are being considered in the north.

“My understanding is that some of the most successful projects on the go, like the Ordsall Chord – the big new piece of infrastructure in Manchester, running on time and on budget – have quite an innovative structure with the contractors and Network Rail embedded in a very deep alliance relationship, where everybody shares the pain and the gain,” he explained.

“And the feedback I get is that it’s a model that works very, very well, as opposed to the more traditional contractor/supplier arrangements. I think we need to find a way of doing that – a much deeper collaboration.”

It’s not the first time that Ordsall Chord has been touted as a good example of alliance working between the infrastructure owner and its suppliers. When RTM attended the historic placement of the Chord’s mammoth network arch back in February, Transport for the North boss David Brown, northern programmes director Chris Montgomery and Skanska’s project director Keith Gardner all sang the praises of the scheme’s tight-knit alliance model.

“You don’t really have this client/contractor relationship,” said Gardner, “it’s more ‘we’re all in this together’, and that works really well. If we didn’t have the alliance model, I don’t think we’d be here at this point in time.”

At the time, Brown also told us that the Chord was a “really good example of how when Network Rail is given the support, the time and the money, they really can deliver these pieces of infrastructure”.

Speaking at the Platform debate, which centred around infrastructure, Hoggarth alluded to the need to take into consideration exactly that: the ability to determine the best amount of time and space needed to deliver a scheme.

“There might be times, for example, where it makes absolute sense to give the contractors more possession times to do the work more quickly, more cheaply,” he said, but explained that TOCs may often reject that because of revenue implications. “But actually, when you look at it, it might be a lot less revenue than the project being delayed, which might be the alternative.

“And we [Rail North] can bring that to fruition and break through that money-go-round and actually do the right thing for passengers.”

Track and train integration in franchises

Overall, Curtis said that while the industry is “in a slightly unusual place” with regards to commitments to closer integration between operators and Network Rail, there are some interesting things coming out of the new franchises, particularly South Western, in terms of how infrastructure is delivered.

The South Western franchise, which was recently awarded to First MTR, promises to see “closer partnership working between track and train”, according to transport secretary Chris Grayling.

“A railway that is predominantly run by an integrated local team of people with a commitment to the smooth operation of their routes, improving services and performance is at the heart of my vision for the network, and First MTR South Western Trains Limited expects to work even closer with Network Rail with the shared aim of giving passengers exactly that,” he said at the time.

“The joint teams will work to drive higher performance, achieve greater productivity in operations, improve maintenance delivery and infrastructure renewals, and support infrastructure improvement delivery, all for the benefit of passengers across the South Western network.”

The South Eastern franchise, which is currently under consultation, also posits the possibility of bringing track and train closer together, “whether it’s planning essential repairs, putting in place improvements that can squeeze in an extra service on a crowded route, or responding to a problem on the network”.

“This new franchise is the right moment to bring things closer together. We are exploring how the train operator can form an integrated operating team with Network Rail, incentivised to deliver the best possible service for passengers,” the consultation document said.

And the new Wales and Borders franchise, for which the shortlist of TOCs was announced last year, is seeking a ‘operator and development partner’ which will be responsible both for running the lines as well as some infrastructure enhancements and renewals.