'Sweeping reforms' open Network Rail up to competition

 

Network Rail has announced ‘sweeping’ reforms that will allow private companies to compete to bring new investment to rail projects, following a major review on the issue.

Chief executive Mark Carne unveiled ‘a raft of opportunities for other companies to directly work on Britain's railway projects’ and compete for a slice of work worth £130m a week.

Such 'radical' moves have previously been resisted by the government-owned company, industry figures said.

”Local

The troubled infrastructure provider described itself as Britain's biggest builder, responsible for over 20% of Britain's infrastructure spend. 

Key reforms include:

  • launching a rewards scheme where money saved from introducing a new idea or innovation is shared between Network Rail and the company or individual
  • publishing a regular pipeline of third party project opportunities
  • creating a swathe of third party project champions across the country who will work side-by-side with delivery bodies, investors and funders to ensure their projects are successful
  • creating a clear service level agreement for third parties so they have clarity and reassurance regarding Network Rail’s legal obligations
  • introducing flexibility to railway standards - looking for where it can encourage innovation and reduce costs without compromising safety

Mr Carne said: ‘I am determined to create an environment where innovative third party companies can compete for and directly deliver railway projects.

‘I am also determined to find ways for the private sector to directly invest in railway projects. As a Government-owned business, this has some challenges, but by unlocking private finance we can potentially deliver railway improvements that would otherwise not be possible.’

Network Rail said the reforms will also unlock new sources of funding, and reduce the burden on central government, because potential investors will have choices over who delivers projects for them.

Darren Caplan, chief executive of the Railway Industry Association, said: ‘We all know that the industry has to change – these changes mark a welcome, positive, approach from Network Rail, which has previously resisted such radical steps.’

Paul Plummer, chief executive of the Rail Delivery Group, said: 'It is important that we find new ways of working together – not just across the railway including train operators and Network Rail routes and their supply chain but with developers, contractors and investors as well as government at local, regional and national level.'

Network Rail said one of the first examples of projects being privately financed in an innovative way is its new two-year deal with Resonate, which will sees the British signalling and train control specialist introduce its new, digital traffic management system into the signalling and control systems for main lines out of Paddington.

The deal sees the supplier financing and bearing the risk of introducing the new technology but it will reap rewards from savings made in reducing delays.

The infrastructure operator has published a review that it commissioned last December from Professor Peter Hansford into how to encourage competition into railway projects and attract more private sector involvement to fund and finance them.

It said it was now publishing ‘a swathe of reforms aimed at breaking down the actual and perceived barriers identified by Hansford.

 

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