Latest Rail News

02.05.12

Network Rail reforms – more competition and less control

Simon Kirby, head of Network Rail’s infrastructure business, has told the Financial Times that a “major target” is for it to win a lead role in the construction of HS2, competing against other businesses.

Structural changes at Network Rail mean that it expects more work and responsibility to be outsourced to other companies, with its own infrastructure business eventually spun out as a separate legal entity that can compete for tenders on the open market.

Kirby told the FT that the “real driver” behind the planned spin off of the business unit was efficiency, with hopes it can benchmark itself against the best third party companies. He said the Network Rail board was considering a proposal to allow it to offer advisory services abroad to generate revenue.

The outsourcing plans – which would reduce the level of Network Rail input and control – would only apply to lower-risk projects worth under £30m, he suggested, with bigger projects and track maintenance remaining under direct Network Rail control.

This is being piloted over the next two years, he said, and is a direct result of the calls in Sir Roy McNulty’s value for money study for greater decentralisation, alliancing, and private sector involvement. Network Rail is already making progress in these areas, having devolved power to the route managers and launched its deep alliance with South West Trains.

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