Rail reviews, results and reliability

I have been back on NCE’s news desk recently and was asked to interview the Office of Rail Regulation chief executive Bill Emery on the Network Rail monitor. This is a quarterly update of NR’s performance as measured by Emery’s team. This particular quarter is important because it is the final quarter of the first full year of this five year investment period so it will give some indication as to how well the rail operator and asset owner is managing the network. The answer, according to Emery was mixed. Although there were some good achievements – less asset failures and a more punctual railway being great news, there were also some major concerns.

Not surprisingly the regulator is very worried about Network Rail’s inability to manage its assets in a sustainable way. This might sound like management speak but it is actually a critical measure, as Emery highlighted to the water sector when he was head of the water regulator Ofwat. It means understanding the status of all infrastructure and therefore knowing the best and most efficient way to maintain it and the best time to upgrade or replace it. For some assets it might be most cost effective to do nothing, for others it should be replaced today as the cost of a failure or temporary repairs far outweigh the costs of later innevitable replacement. The worry the regulator has is that NR doesn’t know enough about its assets to be making the most efficient decisions. I plan to find out more through an interview with Jim Bostock, head of engineering at ORR.

There is also a major disagreement over the efficiency savings that ORR has asked for (21% or £4.1bn in 5 years). Network Rail reported that it was 5.8% more efficient this year (its maintenance restructure reaping £40M of savings for example), but the regulator said it was actually 2.5% less efficient. A full review of this is underway and will be reported in September.

Network Rail also released its annual results this week with increased spending and lower track access fees bringing profits down 75%.

Full articles will be in NCE this week: http://www.nce.co.uk/news/transport/rail-regulator-highlights-significant-weaknesses-at-network-rail/8600711.article

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