Rail funding plans prove DfT has no monopoly of ideas


Last week the Department for Transport (DfT) published a raft of papers on how rail enhancement projects will be chosen in future, including a couple of documents on a new framework for market led proposals (MLPs) that look, at first sight, to be contradictory.

Transport secretary Chris Grayling, who ended the week labelled ‘less than candid’ on the subject of rail enhancements, grabbed a few headlines with an announcement that ‘private companies have been asked to come forward with ideas to deliver a new southern rail link to Heathrow Airport’.

Transport secretary Chris Grayling

In a statement to Parliament, Mr Grayling explained that: ‘Governments do not have a monopoly on good ideas for the railways.’ He made clear that he is looking for the private sector’s cash as well as its ideas, to unlock new private sector funding to invest in railway infrastructure across the country.

Mr Grayling said he was publishing guidance for market-led proposals ‘to provide clarity on what government is looking for from these ideas and the process by which it will consider them’.

In fact, the DfT published two documents on this subject. As well as the guidance, there was a ‘call for ideas’.

The second document states: ‘We are encouraging promoters and investors to bring forward proposals which are financially credible without government support.’

It makes the point again to head off anyone who asks: What if my proposal requires government funding? ‘This call for ideas is for proposals that are financially credible without government support.’

The first ‘illustrative example’ set out in the document is for a commercial new route, where an MLP in the form of a design and build contractor, supported by an investor, proposes a new route which passes through a housing development site with planning permission.

‘The MLP could fund 50% of the construction costs, with the remaining 50% raised through private finance. The business case would robustly illustrate how the financing costs could be met by the increased farebox revenue, subject to ORR consent. These payments would be made on the basis of asset availability.’

That all makes sense so far. Then the document adds: ‘The department could run an open competition for the design, build, finance and maintain (DBFM) contract which would present best value for money for taxpayers.’

This suggests that the DfT expects outside investors to pitch an idea for a new rail line, which would then be put out to competition, with the possibility that someone else would take the idea forward. The aim of the competition would be to secure value for money for taxpayers, who are, as the document has repeatedly stated and as the example sets out, not putting in any money.

The guidance document sets out two categories of MLP. One looks very much like the kind of thing the call for ideas is looking for, although it doesn’t say so explicitly: ‘A Category 1 MLP is one which ‘Does not require public funding that is provided either directly or indirectly by central or local government such as government grants or public financing guarantees […].’

However: ‘Category 1 MLPs are not required to enter a procurement or address the priorities set out in the Rail Network Enhancements Pipeline.’

‘A Category 2 MLP is one in which one or more of the following is true: Public funding is provided either directly or indirectly […].’

Returning to the call for ideas document, another illustrative example of a credible MLP ‘could be one that offers a traffic management system to enhance an existing signalling system - speeding up recovery times following a disruptive incident resulting in fewer compensatory costs for unforeseen train delays (Schedule 8 payments) and improved railway performance’.

Network Rail proposed something similar a year ago, albeit with the idea of using private funding to increase capacity rather than improve reliability.

However, the DfT’s call for ideas explains: ‘The MLP would provide all capital costs of installation (e.g. upgrading hardware, license to software, skills uplift), as well as the maintenance support for the system to ensure it operates effectively. The MLP would need to come to commercial terms with the train operating company, based on the savings and benefits provided by the system.’

This again gives the impression of not having been entirely thought through. As Transport Network and others have repeatedly pointed out, train operating companies are the recipients of Schedule 8 payments from Network Rail, which dwarf compensation to passengers. It’s hard to see how they would make savings to fund the improvements from reduced compensation.

These are a few of the issues that the Government’s plans to cash for rail enhancements through market led proposals raise. They may or may not succeed in this, but one thing is undeniable: ‘Governments do not have a monopoly on good ideas for the railways.’

Register now for full access

Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login

comments powered by Disqus
highways jobs

Environment Officer

Kirklees Metropolitan Council
£29,909 – £32,233 Grade 11 - £33,136 - £35,229
All Environment Officers lead, project manage and/or co-ordinate large environmental projects... Huddersfield, West Yorkshire
Recuriter: Kirklees Metropolitan Council

MCA Hub Co-ordinator

Camden London Borough Council
£40,028 - £46,431
You will lead on the co-ordination of the North and Central Area Mayor’s Construction Academy (MCA) Hub. London (Greater)
Recuriter: Camden London Borough Council

Highways Estimator

Competitive Salary
As the Highways Estimator you will join a busy environment and become an integral part of the team. Hounslow (London Borough), London (Greater)
Recuriter: Ringway

County Highways Manager

Lincolnshire County Council
£55,503 - £60,578
Seeking a highly motivated leader and an excellent communicator, who has a proven ability to build relationships and trust, leading by example. Lincolnshire
Recuriter: Lincolnshire County Council

Local Highways Manager (East) - Lincolnshire County Council

Lincolnshire County Council
G12 £43,662 - £50,430
Seeking someone who combines excellent technical knowledge with a dedication to the customer. Lincolnshire
Recuriter: Lincolnshire County Council

Assistant Director (Planning, Regeneration & Transport)

Rotherham Metropolitan Borough Council
£87,791 per annum  
This is an exciting time to join Rotherham and make a real difference. We are looking for an outstanding Assistant Director who will bring... Rotherham, South Yorkshire
Recuriter: Rotherham Metropolitan Borough Council

Corporate Director

Islington London Borough Council
Up to £135k
You will share our values and be passionate about helping us shape the Islington of the future. Islington, London (Greater)
Recuriter: Islington London Borough Council

Assistant Engineer

Cambridgeshire County Council
£21,074 - £30,756
Looking for strong team players interested in working with a variety of professional and community partners across Cambridgeshire. Cambridgeshire
Recuriter: Cambridgeshire County Council

Junior Energy Manager Apprentice

Brent Council
£15,000 p.a. inc.
The right person for this job will be pro-active and innovative in finding a way forward. Wembley, London (Greater)
Recuriter: Brent Council

Career Grade Drainage Engineer

Swindon Borough Council
£19,092 to £40,680 p.a
Working in the asset management team, you’ll support the work of the Lead Local Flood Authority (LLFA) and Highways Authority. Swindon, Wiltshire
Recuriter: Swindon Borough Council

Highway Construction Project Manager

Brent Council
£50,442 - £53,526 p.a. inc.
We are looking for an accomplished highway construction project manager to support the delivery of two high priority highway schemes. Brent, London (Greater)
Recuriter: Brent Council

Traffic Signals & UTMC Manager

Bristol City Council
£42,683 - £45,591
Looking for someone with proven management experience, enthusiasm, creativity, vision and good communication skills. City of Bristol
Recuriter: Bristol City Council

Principal Highways Project Engineer

Knowsley Metropolitan Borough Council
£34,106 - £35,229 per annum
The post holder will be responsible for project managing the delivery of two highway projects on the Key Route Network. Knowsley (Metropolitan borough), Merseyside
Recuriter: Knowsley Metropolitan Borough Council

Traffic Schemes Officer

Oxfordshire County Council
£22,021 - £29,636 per annum
An exciting opportunity has arisen to play a central role with the Traffic Team in the maintenance of the highway network... Kidlington, Oxfordshire
Recuriter: Oxfordshire County Council

Traffic Engineer

Telford & Wrekin Council
£29,055 to £30,756
This is an exciting opportunity to join Telford & Wrekin Council’s Traffic Management Team! Telford, Shropshire
Recuriter: Telford & Wrekin Council

Assistant Engineer – Traffic Regulation

Telford & Wrekin Council
£23,866 to £25,463
This is an exciting opportunity to join Telford & Wrekin Council’s Traffic Management Team. Telford, Shropshire
Recuriter: Telford & Wrekin Council

Highways Quantity Surveyor

Leicester City Council
£30,756 - £33,136 pro-rata per annum
Working in the Highways Maintenance Group, you will be responsible for the operational highway maintenance activities Leicester, Leicestershire
Recuriter: Leicester City Council

Highways Engineer/Inspector

Royal Borough of Greenwich
£22956 - £32637 per annum
Highways Engineer/Inspector - PermanentThere are plenty of reasons to take a closer look at Royal Greenwich.Royal Greenwich is undergoing a huge trans England, London, Woolwich
Recuriter: Royal Borough of Greenwich

Engineer - Bridges

Cambridgeshire County Council
£32,825 - £35,401
We have a vacancy for a Structures Engineer working within the Bridge’s team! Cambridgeshire
Recuriter: Cambridgeshire County Council


Cambridgeshire County Council
£32,825 - £35,401
You will be required to lead the delivery of a wide range of highway improvements and maintenance projects... Cambridgeshire
Recuriter: Cambridgeshire County Council