Contractors face big penalties for Christmas rail overruns, MPs hear

Contractors involved in the Christmas engineering work overruns at Kings Cross and Paddington in London are going to be hit with significant penalites, the Transport Select Committee heard from Network Rail chief executive Mark Carne today.

Amey which with Network Rail forms the Northern S&C Alliance which did the work at Kings Cross “will lose 25% of its total annual alliance prize” based on a pain/gain arrangement, Carne tld MPs. “A significant penalty for the contractor,” he added.

And the Balfour Beatty/Alstom Signalling Solutions jv which bungled paperwork and testing for signal approvals at Paddington will, he added, be hit with a penalty of “around £200,000”.

“People don’t come to work to do a bad job. There were 11,000 people desperately wanting to do a good job. They will all learn from this.” - Mark Carne

Carne was at the committee with Network Rail managing director of operations Robin Gisby to explain what went wrong at Christmas.

Overrunning works led to scenes of near panic at Finsbury Park on 27 December when the station was turned from a regional to mainline operation as part of the contingency plan for passengers wanting to travel to and from the north.

And travellers on the western routes suffered hours of delays and overcrowding.

Network Rail put out its Christmas Disruption Review report on Monday outlining events that led to the problems.

Issues at the Holloway site north of Kings Cross were the more complex with a series of calamities throwing the best laid plans into chaos. (Information here)

“It was clear,” Carne said, “that by Christmas evening the position at Holloway was unrecoverable. An overrun could have been declared earlier (than the 1pm on Boxing Day that it was).”

Gisby told MPs that he was told about the situation at 13.40 on Boxing Day and was from then on in communication with Carne, the East Coast Main Line control centre in York and TfL and contingency plans were put in place.

However, he said the contingency plan only anticipated an overrun of works of two to three hours. “At no time did we consider we would get nothing back at all (in terms of train service).”

Gisby said he and Carne were in communication throughout events, although Carne, who was out of London at the time, said he did not come back into the capital. “We agreed that Robin, as operations executive director in London, would represent the company," he told MPs.

The committee was keen to understand how Finsbury station staff and Network Rail signalling staff overturned a decision over which platforms the long distance trains would use - a decision which led to passenger gridlock. Gisby said this was still under investigation.

The committee also questioned whether senior management should have been on site to make sure no misunderstandings could occur.

Carne said that going forward “I would seek to find ways to make decisions (on overruns) earlier. And the communications plan was not effective enough. There is no question improvements can be made.”

“Since then, two of the competitor companies have said they will come in and help improve work practices at the Paddington signal supplier” 

However he put up a robust defence of his staff who worked over Christmas across the network.

“People don’t come to work to do a bad job. There were 11,000 people desperately wanting to do a good job. They will all learn from this,” he explained.

He also stoutly supported the Northern S&C Alliance as the way forward for Nework Rail. “The contract has only just been awarded and built in are efficiency improvements that are needed if we are going to deliver cost reductions required under our regulatory settlement.”

He had been impressed too, he said, by the collaboration other contractors had shown, specifically following the problems at Paddington.

“Two of the competitor companies, at our request, have said they will come in and workwith us and that contractor to help improve the way they work."

Carne was asked if Network Rail had tried to do too much work at Christmas; it was delivering its biggest work programme ever.

“No.” Was the unequivocal answer. But he did refer to a conversation with the Secretary of State for Transport on the broader question of the wisdom of carrying out major works in a compressed period of time at Christmas. That can be reviewed, he said, but he later added: “I think we will end up doing the works at the same time as it has the lowest impact on passengers”.

Office of Rail Regulation is currently conducting a review of events over the Christmas period and the committee heard from ORR chief executive Richard Price and director of railway markets and economics Joanna Whittington.

The ORR's work is focusing on Network Rail's planning and contingency, provision by Network Rail of information to the Train Operating Companies and from the TOCs to passengers, and the impact on train service punctuality and reliability. The report is due to go to the ORR board on 30 January.

Price, it was revealed, had been at Finsbury Park station on the 27th December. He had heard about the problems on the news and went to the station to see what was going on.

“What I saw was people queuing and no one from the rail industry giving information or being a reassuring presence," Price told MPs. "I went to understand who was looking after passengers – it didn’t look good to me.“

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