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10.11.16

NR route directors to become ‘customers’ from late November

From 21 November, Network Rail’s route services will be devolved to locally-based directors who will procure and manage the supply chain – moving away from the usual procedure of giving companies the services the infrastructure owner “thinks they want”.

Speaking at the inaugural TransCityRail (TCR) North Conference, Andy Haynes, Network Rail’s contracts and procurement director for route services, said the move effectively means the route directors will become customers.

He added that part of the tag line for route services nationally is “providing a service our route colleagues want to buy from us”.

“That’s going to be a big cultural change for us,” he told delegates in the jam-packed auditorium. “Those colleagues [at a route level] will now become our customers; they will decide what is best for the safety and performance of that route and the right mix of services, the right approach to those services.

“And me and my team will have to respond to what they want to buy.”

As it stands, the rail supply chain can access Network Rail through two different organisations. One deals with large infrastructure projects – major programmes of work supplied by around 300 companies with a £20bn price tag in CP5 – while the other, Route Services, “deals with everything else”.

Amounting to around £10bn in CP5, this can include Digital Railway programmes, contingent labour, on-track machines and plants, food services, commercial property, etc. These route services are provided by around 4,000 suppliers.

From the end of this month, Haynes revealed Network Rail will be supplying services that these route-based companies want to buy from the infrastructure owner.

“It’s going to be quite a tricky mindset for us,” he added. “As opposed to just re-tendering something and giving people the services we think they want, we’re now going to ask them what they want, and figure out how to deliver that most effectively.

“My team will continue to contract nationally for enhancement schemes, but locally, the routes will decide how they go about those other services and I will try my best to support them.”

Haynes opened the TCR Conference, speaking directly to delegates about what Network Rail is looking for in terms of its supply chain going forward. One of the key messages he wanted to send out was that due to a finite money pot, the infrastructure owner was looking for ways to deliver works differently.

Speaking about Network Rail’s shift to the public sector, he highlighted that previously the organisation had “a bit more opportunity” to manage its expenditure, but now it is governed by five-year spending caps.

“We’ve recently deferred to work on programmes of electrification,” he continued. “On the basis of that, the DfT wants us to do some other work. There is no more money available, it’s all allocated, so we have to defer what we already have in order to do this extra work supporting the introduction of new trains. It’s the same spend, just different work.”

But this, Haynes argued, did help “drive the need for Network Rail to change”, meaning it now has to “fundamentally” become a different kind of business.

“Last year Nicola Shaw did a review of Network Rail, the way it was organised and the way it was funded, and the conclusion of that was that we still need to have a national body managing a national rail asset,” he said.

But the Shaw Review also identified that Network Rail’s transformation programme was “the right way to start devolving power to all our customers, the TOCs and the passengers they serve. It said we need to do more, and we need to do it quicker”, added Haynes.

Part of these transformations included attracting more private capital, ensuring that the infrastructure owner moved from being a state-regulated body to being a “public sector body that acts like a private business”. To achieve this, Haynes argued the organisation needed to focus on five ‘C’s: customer focus, cost-competitiveness, commercial, culture and capacity.

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Comments

Lutz   10/11/2016 at 14:06

If NR is not already aware, I suggest they should be prepared for additional cut-backs and slow-downs in funding. Looking at the UK's finances, and the growing needs in other Government Departments, I suspect there are significant cuts on the way to the rail funding budgets, and they may be coming sooner rather than later.

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