Rail Industry Focus

Infrastructure planning: Moving away from stop-start investment

Devolution of Network Rail’s routes should not be seen as the panacea for solving every problem the industry comes up against, according to Jo Kaye, director of network strategy and capacity planning at Network Rail. 

Following the recent Shaw Report into the future shape and financing of Network Rail, which recommended that the infrastructure owner should go “deeper and faster” with its devolution model, Kaye noted that devolution may be the answer to a number things – but not everything. 

Devolved relationships 

She told the audience at Infrarail’s Infrastructure Planning Platform, organised by RTM, that as devolution is rolled out across the country, both at Network Rail and politically, it will be interesting to see how relationships develop with the new bodies on what can be network-wide issues. 

“Clearly, we need to find ways to work with the devolved bodies who are all different in their own ways,” said Kaye. “There are services which are network-wide, so it will be an interesting challenge as new bodies have more powers.” 

Kaye added that differences in funding cycles between the various partners will also be hurdles to be overcome. “I’m very aware that the planning and funding cycle in Network Rail is slightly different to many of the local authorities and organisations we work with and, again, it will be different with NIC (National Infrastructure Commission),” she said. “So we need to work closely together on this.” 

Northern route 

The Shaw Report also recommended the establishment of a new route for the north, which would be formed from the northern sections of the current London North East (LNE) and London North West (LNW) routes. 

Asked about the developments in this area, Kaye said: “For some time now we’ve had a dedicated infrastructure projects organisation across the totality of the north to interface more effectively with colleagues in Rail North and Transport for the North (TfN). Similarly, in strategic planning, for some years, we’ve had a directorate dedicated to the north of England. 

“Mark Carne has asked Michael Holden [the former CEO of Directly Operated Railways] to take a look at that proposal, as there is a multiplicity of stakeholders and customers involved in the concept of a Northern route.“Michael is doing the rounds, on how we can meet those needs. He will be making his recommendations in the next few months.” 

During the panel session David Hoggarth, director at Rail North, added that his team worked very closely with the Shaw Review team and was “delighted with the recommendation and are happy with the proposal”. 

He added that Rail North will now work with Network Rail to implement it as soon as possible. “This is a policy strategic decision to align a major infrastructure provider with the new client of the north, TfN,” said Hoggarth. 

^{Left to right: Crossrail 2's Michèle Dix CBE, Network Rail's Jo Kaye and Rail North's David Hoggarth}

Speaking about devolution, and Rail North’s ground breaking agreement with the DfT to co-manage the new Northern and TransPennine Express franchises, Hoggarth added that the clear aim is to have full devolution, like Transport Scotland, going forward. 

“To do that we need additional powers,” he said. “We are working with TfN to put those powers into the order to create TfN from next year. Having that strategy and delivery is really important.” 

Hoggarth also noted the importance of ensuring that devolution to the north is followed through and has a continual programme of infrastructure upgrades. “We need to move away from stop-start investment.” 

Asked how this funding should be delivered, and whether Rail North and TfN could implement a business rates supplement for the north similar to Crossrail, Hoggarth said that they do not have the powers for this and it is something that hasn’t actively been considered. 

“What we do want to do is work with industry and business to understand their needs, which hasn’t always been possible in the past,” he said. 

Project funding 

Michèle Dix CBE, managing director of Crossrail 2, also joined the panel session on the final day of Infrarail. She told the audience that while recent NIC recommendations, which say that Crossrail 2 must be developed ‘as a priority’, are welcome, there are risks without having a “complete strategy” in place for the whole country.

“You might want to deliver a strategy first across the country, and then look at individual schemes within that strategy to understand when you make decisions and recommendations that when something goes forward, when there is competition for funding, you have the priorities right,” said Dix. 

“I’d like to have seen that strategy in place already. I think it is a fundamental thing that is required to underpin the whole process.” 

She added that NIC also made recommendations to see if her team could make Crossrail 2 more affordable, as the project is estimated to cost £30bn. 

“So, one of the challenges is to look at all the branches and stations; we’ve got to justify those,” she said. “NIC also threw out a challenge saying if Crossrail 2 is going to deliver homes for London we need to say how we are going to deliver rather than just enable them. 

“Also, what private sector involvement can we get in building some parts of the scheme. Rolling stock? Yes, and then some stations. An example people throw out is Canary Wharf on Crossrail 1. Are there other stations like that along the route?” 

She added that the Crossrail 2 team will aim to replicate the Crossrail 1 model with a business rates supplement and, hopefully, an extension of the Mayoral Community Infrastructure Levy. 

“Those are the challenges we are looking at this year, then we’ll make the business case and then start in earnest on a single preferred scheme come March 2017, which we aim to submit for a Hybrid Bill in 2019,” she said. 

Private funding 

On the second day of Infrarail, Network Rail’s chairman, Sir Peter Hendy, stated in his keynote speech that there is a necessity to get private funding into the railway to deliver future upgrades. 

Discussing this change in funding mindset, Kaye said: “It is a conversation that has only recently started. 

“I think the reliance on central government funding for big infrastructure schemes has been there for some time, and it will take some time for people to get their heads around another way of doing things. 

“But I think it is well understood that railways don’t just exist for their own good; they are there to serve communities and bring benefits in all kinds of ways whether it is employment, housing or social.

“It therefore only seems right and proper that those who ultimately benefit from the things that railways do should be thinking about how they contribute. It is a very different way of thinking. 

“For many years, people have not had to think like that. It is a conversation we want to start and continue with.”

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