Analysis

Network Rail under fire from regulator for missed upgrade delivery targets

ORR monitor

Latest Office of Rail and Road (ORR) quarterly monitor challenges Network Rail over network renewal performance and poorer than expected reliability.

Network Rail’s delivery performance across its multi-billion pound asset enhancement programme is to be investigated by the Office of Rail and Road (ORR). 

The regulator’s action has been prompted by Network Rail’s continued failure to hit agreed targets on its asset upgrade programme and following “below expectation” performance on many parts of the network.

“Network Rail has made a slow start in delivering on its enhancements and performance targets for CP5 and we have asked it to demonstrate how it plans to get back on schedule to deliver on its commitments to 2019,”  ORR chief executive Richard Price.

ORR’s latest quarterly  performance monitor report highlights a catalogue of missed targets and says that while there has been a 59.1% rise in passenger journeys and 9.1% rise in freight usage since 2005, reliability across the network was not keeping pace with this demand.

“Network Rail has made a slow start in delivering on its enhancements and performance targets for CP5 and we have asked it to demonstrate how it plans to get back on schedule to deliver on its commitments to 2019,” said ORR chief executive Richard Price.

“The company is also falling short of its own targets on completing renewals works for the upkeep of the rail network,” he added. “While there is good performance on the East Coast Mainline and the freight sector, overall reliability on some routes such as the Southern, Thameslink and Scotland routes are below requirements.”

Network Rail is responsible for delivering more than £12bn of enhancements to the rail network such as new stations, electrification and bridges in the current Control Period 5 2014-19 (CP5) as part of its £35bn overall five year settlement to manage and operate the network.

However, the latest ORR report highlights that: 

  • At the end 2014-15, Network Rail had missed 30 out of its 84 planned milestones with some projects facing delays or cost escalations. ORR is also investigating whether the company has the right measures in place to plan and deliver the projects it committed to.
  • Network Rail has delivered less renewal work than it planned, with track renewal 7% behind plan; signalling renewals are 63% behind schedule; and overhead line renewals are 77% behind target. 
  • Timely completion of these works is vital for improving punctuality as well as the long-term sustainability and safety of the rail network.
  • Performance on the East Coast Mainline and freight sector has been good, however, overall punctuality of train service performance remains at 89.6% – 2.9 percentage points lower than the 92.5% target. 

ORR said its investigation will determine whether the company has done all it can to improve performance and punctuality on the network.

“Network Rail’s new leadership team, under CEO Mark Carne, is committed to deliver the pace of change required to build a better, more modern network that passengers and businesses can rely on.” Network Rail

    Commenting on the publication of the Office of Rail and Road’s latest monitor of Network Rail’s performance, a Network Rail spokesman said: “Network Rail has recognised the scale of the challenge. There are clearly opportunities to improve following decades of under investment in the rail network.”

    However, Network Rail highlighted that it was still the safest passenger network in Europe and the railway asset reliability is the best it has ever been.  

    “The increase in passengers means that more people are getting to their destination on time than ever before,” said Network Rail. “Network Rail’s new leadership team, under CEO Mark Carne, is committed to deliver the pace of change required to build a better, more modern network that passengers and businesses can rely on.”

    Network Rail added that over the past 12 months (2014/15) it had:

    • Delivered a 4% improvement in safety on 2013/14
    • Accommodated 67.3M more passenger journeys, reaching a new record high of 1.65bn – a 4.2% increase (40% above CP5 forecasts) and over double the number of just 20 years ago
    • Invested £3.4bn in growing and expanding the network, over 40% higher than the average for the past five years and double the rate of 2009/10 – the equivalent of building an Olympic Stadium every month
    • Renewed £3bn of the base assets of the railway, 6% higher than the average for the past five years
    • Delivered eight of the top ten project milestones on time
    • Continued cutting the cost of running the railway, reducing total cost by 40% in the past decade and saving taxpayers and fare payers £5.2bn 
    • Run almost 20,000 more trains than last year – a new record level and more than a million more trains per year than in 2004/05
    • Improved the reliability of our assets to record levels and 5% better than last year
    • Removed some 7.6M lorry journeys from Britain's roads by increasing the strategic freight network
    • Generated £9bn of wealth for the UK economy
    • Trained and gave careers to over 300 apprentices and graduates
    • Closed 120 level crossings, adding to the 804 closed over the last five years and reducing risk by 30%