Summer of discontent at Network Rail

 

Major upgrade works the national rail network have been suspended with ministers blaming the top brass at Network Rail for mismanagement that has caused delays, missed targets and spiralling costs.

Transport secretary Patrick McLoughlin said the catalogue of problems ‘could and should have been foreseen’ as he announced to parliament that large parts of a £38bn five-year upgrade plan were ‘paused’.

Transport commissioner in London Sir Peter Hendy has subsequently replaced Network Rail’s chairman Richard Parry-Jones.

Electrification of the Midland mainline linking London to Sheffield has been suspended, as has electrification on the Transpennine route between Leeds and Manchester.

Electrification of the Great Western Line is still a ‘top priority’ even though the costs are higher than Network Rail forecast.

Network Rail’s annual report released this week revealed a grim assessment for Control Period 5 (CP5, 2014-19).

Chief executive Mark Carne apologised to rail users and said he had given a frank assessment to the Department for Transport, which included conceding the total enhancement programme’s cost now exceeds the available five-year budget and there were delays to several projects.

‘During my first year in the job I have looked closely at every aspect of our business and it has become clear that Network Rail signed up to highly ambitious five-year targets set by the regulator. Based on historic improvements from a low base, we were overly optimistic about the capacity of our company and our supplier base to step up several gears in order to achieve the plan, especially given the complexities of a network that is at full capacity much of the time,’ he added.

The news closely follows a damning report from the Office of Rail and Road watchdog which stated Network Rail had missed more than a third of its targets in the first year of the CP5, raising ‘serious questions about its ability to deliver future projects’.

Responding the Network Rail’s annual report, Mr McLoughlin laid out a four-step plan to parliament including ensuring none of the executive directors will receive a bonus for the past year.

‘Secondly I am appointing Richard Brown as a special director of Network Rail with immediate effect. He will update me directly on progress. Third, I intend to simplify Network Rail’s governance by ending the role of the public members. I thank them for their commitment. But the reclassification of Network Rail has changed the organisation’s accountability,’ he said.

‘Fourth, it is important that we understand what can be done better in future investment programmes. I have therefore asked Dame Colette Bowe, an experienced economist and regulator, to look at lessons learned. And to make recommendations for better investment planning in future. I will publish her report in the Autumn.’

Mr McLoughlin also listed issues that were bogging down rail improvements but said they were 'no excuse'.

'Important aspects of Network Rail’s investment programme are costing more and taking longer. Electrification is difficult. The UK supply chain for the complex signalling works needs to be stronger. Construction rates have been slow,' he said, adding that it has also 'taken longer to obtain planning consents from some local authorities than expected'.

Recently re-elected chair of the Transport Select Committee, Louise Ellman, said: ‘It is clear that some of the important schemes ministers have previously announced will not happen or will be delayed. But it is unclear what the practical implications of ‘pausing’ electrification will be for the Midland main line and the Transpennine route between Leeds and Manchester.

‘The Transport Committee I chaired last Parliament questioned whether the planned rail investment programme was deliverable. That Committee warned the Department in January that there were problems with escalating costs and poor planning and management.’

Michael Dugher, Labour’s shadow transport secretary, said: ‘Since 2010, passengers have had to endure a catalogue of failures on our railways. Ministers may try to shift all the blame to Network Rail, but this has happened on the Government’s watch and the responsibility for this mess lies squarely with the Government.

'Labour has warned time and time again that there needs to be fundamental change in how our railways are run.’

 

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