Analysis

Is government support for infrastructure jeopardised by “pause” in rail programme?

Rail "Question Time" panel at Tomorrow’s Rail conference set out the challenge facing the industry to shore up confidence in industry’s ability to deliver economy boosting infrastructure programmes.

Tomorrows Rail

At the recent Tomorrow’s Rail conference a "Question Time" style panel of rail industry experts out forward their view on questions raised by the audience starting with a highly topical question from Infrastructure Intelligence editor Antony Oliver:

The panel: (chaired by BBC's Kirsty Wark)

Christian Wolmar, transport journalist and prospective Mayoral candidate

Richard Price, chief executive Office of Rail and Road

Sir John Armitt, ICE vice president 

Paul Nowak, assistant general secretary, TUC

Jim Steer, founder Steer Davies Gleave

Question: “Do the recent problems identified with Network Rail’s CP5 programme delivery risk undermining government confidence in the industry’s ability to deliver and so jeopardise continued public investment in wider infrastructure as a key driver for economic growth?”

Answers:

Christian Wolmar, transport journalist and prospective Mayoral candidate

This is the worst crisis to hit the railway in 15 years. I think that we are the only country in the world with such a wide separation between the infrastructure and the operators and that is bound to create the kind of problems that we have experienced. We seem to have a crisis every three of four years in the rail industry. A lot are caused by the fragmentation in the industry. I do think that George Osborne – who has been terribly kind to the railways over the last five years – will maybe start to look elsewhere and I suspect that there will now be much greater questioning over HS2 and Crossrail 2 in the next year or so than there would have been before.

Richard Price, chief executive Office of Rail and Road (ORR)

Does what we have seen undermine confidence in the industry? Well it is no secret that Network Rail needs to address its capability issues and there needs to be more clarity around what the government wants to buy for the railway and how that is going to be delivered. So absolutely those issues need to be addressed. But we are one year into a five year control period of investment. It is a big challenge but there is scope for recovery. What we need to do as a regulator, government and industry, is to make sure that Network Rail has the commercial flexibility to deliver and at the same time is really keenly focused on the interests of its customers.

Sir John Armitt

Yes they need to rebuild confidence but the sad thing for me about this is that Network Rail, day in, day out, delivers millions and millions of pounds of contracts effectively. As always, you get one thing that goes wrong and that becomes the story and the thing that ministers lead on. Nobody looks at what is actually being done successfully and in fact I feel quite sorry for Network Rail who has had a tough six months. So an electrification project budget starts to go out. You can’t start to pull apart a whole business simply because a couple of projects in a £38bn programme go over budget. You tackle those projects, learn the lessons which can often be found at the beginning and move on."

"You can’t start to pull apart a whole business simply because a couple of projects in a £38bn programme go over budget." Sir John Armitt

Christian Woolmar, transport journalist and prospective Mayoral candidate

I really don’t buy that. Network Rail has messed up here and we have to accept that they have messed up big time. Milestones have been missed and they accepted a programme that they couldn’t deliver. [Government] had no other option [other than to pause the electrification projects] because they simply could deliver it. If you take on a programme you should deliver it.

Paul Nowak, assistant general secretary, TUC

I think there is a danger of confidence being undermined when there is a gap between government rhetoric on the one hand and what happens in practice on the other. As someone who used to be a regular sufferer of a regular train journey from Liverpool to Newcastle I was always a little sceptical about George Osborne’s HS3. So when he announced the pause in electrification it entirely sent out the wrong signals to the public.

Jim Steer, founder Steer Davies Gleave

While I don’t buy Christian’s “the worst thig for 15 year”, it is serious. For Network Rail the priority is restoring some confidence in the organisation because it has taken a battering. But we all have a responsibility across the rail industry to help steady the ship - and I include the train operating companies and the ORR – Richard [Price’s] organisation has done a good job pointing out that these thigs are coming but what else could it now do to help to steady the ship. And also to our friends in government as the specifier - what exactly do we want there. It is quite hard being the delivery person if you don’t exactly know the answer to that.

"Frankly quite a lot of the targets where Network Rail is currently off track we believe they have a fair chance of recovering over that five year period." Richard Price ORR

Richard Price

I agree with what has been said about the railways day in day out delivering reliably for a huge number of people but it is when things go wrong they inevitably hit the headlines – and rightly because that is where people are frustrated. The test of reputation is often how we deal with those incidents – how people looked after and I am sure that there are more things that we could do to help.

One of the things that this regulatory regime gives is a degree of long term stability to recover and deliver. Frankly quite a lot of the targets where Network Rail is currently off track we believe they have a fair chance of recovering over that five year period.

 

Visit the Infrastructure Intelligence video section for further coverage of the Tomorrow’s Rail conference.

If you would like to contact Antony Oliver about this, or any other story, please email antony.oliver@infrastructure-intelligence.com.