Major changes to Network Rail proposed

[Mike Storey]

If this report is anywhere close to the actual proposals on Tuesday, let's see if any TOC actually wants to do it. DafT are finding it hard enough to get anyone to bid for franchises, let alone take even more risk. I cannot see the Treasury granting a reduction in franchise premia, or subsidy to increase overall, to fund this approach. I would also wonder how ORR, as the safeguarder of competencies and SMS's, will approach this? Such a strange answer to the wrong question does seem very typical these days, if true.

 

I cannot recall how maintenance and renewal worked on the Chiltern Lines when the successful Evergreen phases 1 and 2 were in progress - anyone??

 

As for Alliances, previous and current, allegedly holding up maintenance and renewals, I would point out that the current ScotRail Alliance MD was a Network Rail Route Director previously, so unlikely there, and that the guy who had been in charge of the SW Stagecoach Franchise was ex-NR (he is now head of the CAA).

 

With regards to NR programme managers not being those who are used to serving the end customer directly, I would also point out that the Programme Director of the London Bridge re-building project had previously been a senior manager at GNER and then NXEC.

 

Stereotyping current personnel in any of these situations is not necessarily an accurate portrayal.

[Edwin_m]

The main problem at present seems to be with some of the major enhancements, not with day-to-day operation and maintenance of the railway.  This in turn is down to the DfT (and to a lesser extent Railtrack/NR) not having long-term plans for the industry which allow the necessary people to be trained up or indeed incentivise them to join the railway. 

 

So the solution is to totally up-end the day to day operation and maintenance too? We now seem to be in an age where gut reaction by ill-informed politicians trumps (pun intended) expertise and evidence...

Edited December 3, 2016 by Edwin_m

[Nearholmer]

Interesting strand in some of this discussion, which suggests that vertical integration would be "all too difficult" because of a multiplicity of operators.

 

An alternative view is that vertical integration is the normal, natural state of a railway, the one that applies in most places, and has applied for most of history - it demonstrably works, and works well.

 

And, where it applies, there are pretty simple mechanisms that allow the passage of trains of "non incumbent" railway companies to pass in a safe and orderly fashion, and to divvy up the proceeds, and allocate costs.

 

We have a very large living example of a vertically integrated railway in the U.K. right now: London Underground, and that works jolly well (admittedly no "non incumbent" trains). And, I know I'm an old diehard, but reconstituting The Real Southern Railway/Region wouldn't tax the mind for too long. And, isn't HS1 vertically integrated? I should really know!

 

So, don't be kidded that the strange system that has existed in Britain for the past couple of decades is normal; it definitely isn't.

 

The fact that no TOC is currently competent to care for infrastructure is no surprise, given that isn't their job, but it would probably take no longer to render them competent, by transfer of personnel, than it took to render them incompetent by dismemberment in the first place.

Edited December 3, 2016 by Nearholmer

[PM47079]

As a freight driver I worry about this. If maintenance needs doing it will be done when it's convenient for the tocs. So nighttime which is when we run because we can't get daytime paths for all our trains. Also if you are in charge of the infrastructure will you want heavy freight on your track when you run units. Best put it on the road saving wear and tear. The rail freight industry is struggling at the moment I have never been as worried about the long term future of it as I have been this Last year

[russ p]

I wouldn't trust chrome dome grayling to assemble a brio set never mind sorting network rail

[Captain Kernow]

Sorry, but I disagree. I think that this is something that should have happened a long time ago. There are too many fingers in the pie and all wanting to make a profit. It's time some of the digits were extracted.

Others, particularly Mike/Stationmaster have effectively debunked your above comments, so I doubt that I can add more, but I would ask you whether you have ever worked in the industry yourself?

 

Don't forget that Network Rail is one of the few organisations in the current rail industry ('fingers') where the 'profits' are not siphoned off by shareholders.

[Wheatley]

An alternative view is that vertical integration is the normal, natural state of a railway, the one that applies in most places, and has applied for most of history - it demonstrably works, and works well.

 

And, where it applies, there are pretty simple mechanisms that allow the passage of trains of "non incumbent" railway companies to pass in a safe and orderly fashion, and to divvy up the proceeds, and allocate costs.

I agree, and I'm lucky enough to have worked in the industry when the UK did this very well despite being the butt of everybody's sandwich jokes. And I suspect there's just enough corporate memory left at senior level for it to work again if the people who know how to make it work are allowed to get on with it.

 

But they won't be, the DfT are in charge and that scares me.

[Captain Kernow]

Well......... there was a hugely serious flaw in the model of privatisation that was applied to the railways in this country: it put far to much power/influence in the hands of a body (Railtrack, which then became NR) that is too remote from the fare-paying customers to be properly accountable, and far too monolithic to be useful.

 

If any change resolves that problem, it might help; if it doesn't, it almost certainly won't.

 

But, even if it does help, it might not help enough, because another huge flaw in the industry is short-termism, driven by the franchising arrangements, even after the tinkering that was supposed to resolve it.

 

Anything that passes accountability for infrastructure to TOCs, though, will require a gigantic change in their competence-base and outlook, as others have said above. Running a vertically integrated railway is a whole lot more challenging than running a TOC as they exist now, not that that is exactly simple.

 

A question: to what degree might Brexit open-up models that haven't been available recently?

 

You may just be on to something with your mention of Brexit, as the 1994 privatisation model was trumpeted at the time as being compliant with EU requirements to separate track and train operation.

 

Interesting strand in some of this discussion, which suggests that vertical integration would be "all too difficult" because of a multiplicity of operators.

 

An alternative view is that vertical integration is the normal, natural state of a railway, the one that applies in most places, and has applied for most of history - it demonstrably works, and works well.

 

In historical terms though, the vertical integration took the form of the old companies and latterly British Rail. There was some application of 'running powers', but much of the operation consisted of 'Company A's' trains running over 'Company A's' tracks.

 

Thinking back to pre-Grouping times for a moment, I dread to think what the legal and contractual/compensatory arrangements of that kind of set up would look like if imposed on the rail system today. It might make the current system of Schedule 8 payments etc. look positively quaint.

[Captain Kernow]

I agree, and I'm lucky enough to have worked in the industry when the UK did this very well despite being the butt of everybody's sandwich jokes. And I suspect there's just enough corporate memory left at senior level for it to work again if the people who know how to make it work are allowed to get on with it.

 

For that to happen, it would effectively mean either the complete (or near-complete) re-nationalisation of all TOCs and integration of them, plus the rolling stock companies probably, into one organisation (either publicly or privately-owned), or the re-creation of regional companies. Either way, I don't see the current TOCs surviving such a move (whether that is a good or bad thing, others can decide!).

 

I also remember starting my career in BR days. It was a grim time in many ways, it was essentially a case of 'managed decline' in the early 1980s. The later resurgence in rail use may also have happened under BR, but the ability to equate train delays with pounds has definitely led to many infrastructure improvements, which would never have happened under the old BR, the Cotswold line redoubling being one of them, a smaller example being the reopening of the island platform at Taunton. The old BR would simply have looked for a way round these issues.

[Captain Kernow]

was one of the reasons I decided to retire from Network Rail earlier this year.

 

I can only hope that whatever happens, all staff remaining in the rail industry are treated fairly and correctly. Good luck !

This is one case where I can emphatically agree and say 'me too!'

[Mike Storey]

Interesting strand in some of this discussion, which suggests that vertical integration would be "all too difficult" because of a multiplicity of operators.

 

An alternative view is that vertical integration is the normal, natural state of a railway, the one that applies in most places, and has applied for most of history - it demonstrably works, and works well.

 

And, where it applies, there are pretty simple mechanisms that allow the passage of trains of "non incumbent" railway companies to pass in a safe and orderly fashion, and to divvy up the proceeds, and allocate costs.

 

We have a very large living example of a vertically integrated railway in the U.K. right now: London Underground, and that works jolly well (admittedly no "non incumbent" trains). And, I know I'm an old diehard, but reconstituting The Real Southern Railway/Region wouldn't tax the mind for too long. And, isn't HS1 vertically integrated? I should really know!

 

So, don't be kidded that the strange system that has existed in Britain for the past couple of decades is normal; it definitely isn't.

 

The fact that no TOC is currently competent to care for infrastructure is no surprise, given that isn't their job, but it would probably take no longer to render them competent, by transfer of personnel, than it took to render them incompetent by dismemberment in the first place.

 

Vertical integration has worked terribly in France, and when they tried to divide their NR equivalent (RFF) from their operations equivalent (SNCF), got even worse. Now back together again, SNCF continues to try to elbow competition out of the way. Much the same happens in Germany, with less success, and not as overtly elsewhere in Europe where the state still tries to run things. 

 

London Underground is not a very auspicious example. Go back 20 years and it was close to being a basket case, in terms of renewals, maintenance and enhancements. What saved it was the thrusting involvement of a very loud American and then a very dynamic no-nonsense Head, who now heads Network Rail.....

 

London Overground is extremely good, but is vertically separated. It also swallows enormous amounts of subsidy compared to its contemporaries.

 

HS1 is not vertically integrated, in that it is NR who act as its professional competence, maintain, repair and renew it, but do not own it, and of course, South East trains use it as much as Eurostar, plus a few freight trains now I believe.

 

Thus my conclusion from all this, is that it is about the abilities, dynamism and experience of the individuals (and the team they build around them) who run each part of the railways that really determine its performance and effectiveness, far more so than the organisation, processes and politics. The latter group obviously determine the limits within which any individual can exert their responsibilities, but it does not limit the arena within which they can exert their influence. In the end, money does determine ultimate success, and there are countless examples where that hypothesis is proven, but there are also too many examples which can disprove it, such as NR managing major projects right now, or SNCF, or DBAG, or indeed the British Transport Commission, who probably put back the advancement of rail by a decade after their incompetence during the largesse of the Modernisation Plan. We all remember Beeching, Parker, Reid, but who can remember any individual from the BTC era (except someone who will come up with a name or three immediately after I post this.....) other than the engineers, such as Riddles, who spent the money? Ok, perhaps a little unfair, but hey, let me make a point will ya?

 

Even Mr Higgins, my old boss at the Olympics, and his brief sojourn at NR (where he is credited with undoing so much of the Coucher excesses in his brief time there) is the key personality and brain (which is extraordinarily huge - believe me) is the driver of the success in obtaining powers despite the enormous range of opportunist and/or ignorant (I do not include well argued and/or directly affected, opponents in that) opposition ranged against the plan. He could be making enormous amounts of money, many times what he earns there, chairing or non-execcing two dozen other companies, for a fraction of the time and effort he expends, but he chooses to advocate something he really believes in. Unlike his turncoat CEO, who was my boss at NR, who has grabbed the money elsewhere.

 

Give Hendy and Carne a chance for goodness sake, you ..........and ......... ....... in Marsham Place and Westminster! 

[SM42]

It was not so long ago that the maintenance companies were brought in house to Network Rail to imrove efficiency and save costs.

 

The brief detail this proposal reported  (I await further details on Tuesday) can only mean an increase in costs from the contractual soup that it will create.

 

Likewise I think putting maintenance in the hands of companies who have one eye on the bottom line and shareholder dividends (as well as the competition) is a recipe for disaster. How long before maintenance regimes are cut back to sweat the asset further?

 

I fear getting anything done will be a nightmare and a repeat of Hatfield

 

Andy

[Mike Storey]

It was not so long ago that the maintenance companies were brought in house to Network Rail to imrove efficiency and save costs.

 

The brief detail this proposal reported  (I await further details on Tuesday) can only mean an increase in costs from the contractual soup that it will create.

 

Likewise I think putting maintenance in the hands of companies who have one eye on the bottom line and shareholder dividends (as well as the competition) is a recipe for disaster. How long before maintenance regimes are cut back to sweat the asset further?

 

I fear getting anything done will be a nightmare and a repeat of Hatfield

 

Andy

 

I was agreeing with you as you started, but profit was not the key driver at Hatfield - it was ignorance. Ignorance of the fact that your company is a safety critical operation and not a property developer, and by so doing, let all your professional competence walk out of the door. Ignorance that was shared by the DfT and Whitehall/Westminster. Belief in the competence of suppliers - it was the zeitgeist of its time. The wide boys who then came in to run the zones/routes just added to the problem - my zone director at the time had previously been in charge of laying telecomms cables for a TV company, but he was apparently really going to shake us up. Hatfield happened on his watch ( I don't blame him, he did not know any better), as he was too busy cosying up to GNER and the threepenny bit challenge on spilt coffee in the first class because of track ride, and directed our civil engineer and his team to prioritise that (they were the ones who ended up in the dock before M'Lud, quite unfairly IMHO)...... Corbett had started to correct that, really started to correct it (he gave my boss a right bollocking in front of us on a Quarterly round table meeting just before Hatfield), but bang! He did not get the chance to sort it all out.

 

One can argue that profit (actually shareholder dividend) drove that strategic decision initially, but it did not sustain it. Anyone in the railway industry with any memory will not allow that to happen again organisationally, and neither will the ORR (HMRI), as long as they are allowed to exist. BUT, if you look carefully at the safety critical incidents that have occurred in the past ten years (and there are not a huge number), most have involved long serving railway industry folk, who should have known better, taking a calculated risk.

 

But I agree that such a decision by Grayling, if true, will increase cost to no real effect.

Edited December 3, 2016 by Mike Storey

[jjb1970]

Private ownership is not incompatible with high standards of engineering and safety. If it was then the world would be strewn with the remains of a lot more crashed airliners than we do see, giant craters where once oil refineries, power plants, chemical plants etc once stood and offshore divers would have a lifespan counted in minutes. The fact that Railtrack was a disaster says more about Railtrack senior leadership than about the concept of private ownership. I think the secret is leadership, which is hardly a secret as people have understood the value of leadership since the earliest days of mankind however too often management replaces leadership.

[Nearholmer]

Mike & JJB,

 

I agree with you both that good leadership is vital, and that applies whatever the model being operated, private or public sector, vertically integrated or not.

 

But, the point I'm trying to get across is that managing a vertically integrated railway involves 'planing with the grain', whereas managing a disintegrated one involves 'planing against the grain', so that given equal quality of leadership, the former will yield better results than the latter.

 

Of course, there are a million other points to address besides whether the thing is to be vertically integrated or not, and all the vertical integration in the world won't help if short-termism is allowed to persist, or if the thing is starved of necessary funding, or the lines of accountability to the fare and taxpayer are too long or convoluted.

 

One thing that would be very interesting to know, is whether what is about to be announced has been arrived at in spite of, or because of, what the current leadership of NR have said to DfT and Government ........ there is now, after all, a good smattering of very senior people at NR Central who have deep experience of running a vertically integrated railway.

 

Kevin

[TheSignalEngineer]

In historical terms though, the vertical integration took the form of the old companies and latterly British Rail. There was some application of 'running powers', but much of the operation consisted of 'Company A's' trains running over 'Company A's' tracks.

 

Thinking back to pre-Grouping times for a moment, I dread to think what the legal and contractual/compensatory arrangements of that kind of set up would look like if imposed on the rail system today. It might make the current system of Schedule 8 payments etc. look positively quaint.

They had the Railway Clearing House to apportion various dues under running powers and cross boundary traffic.  IIRC it took about 12 years after Nationalisation to sort out all of the bills.

[Gilloverland]

Keep your ears open on Tuesday for the changes

 

http://www.itv.com/news/2016-12-03/network-rail-to-be-stripped-of-monopoly-over-britains-railway-tracks/

 

One things certain though, the Unions won't be happy. As for us staff - well it all depends on the proposals because although the Railtrack experience as a whole wasn't good, some IMCs were considerably better than others in relation to how they treated their staff / organised themselves.

 

On a separate note the Unions are consulting on a new 4 year pay deal due to be concluded this year. While a good headline figure has been tabled it does come with numerous strings attached which fundamentally change the way we work (by cutting back on numbers) to save money - not all of which are safe, practical or actually going to be effective. I foresee further Union action taking place to the detriment of passengers.

 

Now what was it someone said on another thread about not kicking a hornets nest......

Good headline figure - who are you trying to kid 1.5% doesn't even come close to covering what we would lose by having annual leave in hours rather than days!

[Bernard Lamb]

I wouldn't trust chrome dome grayling to assemble a brio set never mind sorting network rail

Do you know him well?

I have had one meeting with him and he came across as very open and wanting to help.

He started the meeting by saying David had sent him to find out exactly what the problem was and needed help to understand the situation.

I presume that is how he approached the rail people.

He can only act on the strength and accuracy of what information that people provide.

On another occasion he bought a bottle of single malt for my colleagues so he can't be that bad.

Bernard

[Zomboid]

Pretty much any organisational model can be made to work, but endlessly piddling around and changing it is bound to make things both more expensive and worse.

I wouldn't pick the setup we have now out of a catalogue, but there is nothing fundamentally wrong with it, so another revolution is just not needed.

[russ p]

Do you know him well?

I have had one meeting with him and he came across as very open and wanting to help.

He started the meeting by saying David had sent him to find out exactly what the problem was and needed help to understand the situation.

I presume that is how he approached the rail people.

He can only act on the strength and accuracy of what information that people provide.

On another occasion he bought a bottle of single malt for my colleagues so he can't be that bad.

Bernard

I don't want to know him,in fact I hate him.

He supported a bloke who has never met me yet accused all of my type as taking out loans we can't afford and living beyond my means.

[Wigan Wallgate OO Gauge]

So NR is our scapegoat for all the railways issues it seems!

[The Stationmaster]

Interesting strand in some of this discussion, which suggests that vertical integration would be "all too difficult" because of a multiplicity of operators.

 

An alternative view is that vertical integration is the normal, natural state of a railway, the one that applies in most places, and has applied for most of history - it demonstrably works, and works well.

 

And, where it applies, there are pretty simple mechanisms that allow the passage of trains of "non incumbent" railway companies to pass in a safe and orderly fashion, and to divvy up the proceeds, and allocate costs.

 

We have a very large living example of a vertically integrated railway in the U.K. right now: London Underground, and that works jolly well (admittedly no "non incumbent" trains). And, I know I'm an old diehard, but reconstituting The Real Southern Railway/Region wouldn't tax the mind for too long. And, isn't HS1 vertically integrated? I should really know!

 

So, don't be kidded that the strange system that has existed in Britain for the past couple of decades is normal; it definitely isn't.

 

The fact that no TOC is currently competent to care for infrastructure is no surprise, given that isn't their job, but it would probably take no longer to render them competent, by transfer of personnel, than it took to render them incompetent by dismemberment in the first place.

 

But did vertical integration work like that?  In reality we worked in our various departments and very few of them covered across the whole board of both commercial and output (operations was, I think, finally the only one left doing that.

 

In reality many relationships worked and decisions were made because people knew each other and had various targets (budgets etc) to work to.  The instant the organisation was changed to the 'business led' one a whole new matrix began to, and had to, develop.  It offered considerable benefits for identifying and controlling costs which had not existed previously but the matrix was very different from 'traditional vertically integrated railway' in many respects although somethings were still done in the old ways - be they good or bad.

 

The separation of infrastructure ownership and management at privitisation was an extremely sensible devision because it allowed proper contractual relationships to be put in place although that was clouded by selling off Railtrack and it then being run in a way which wasn't beneficial to the industry as a whole.  replacing it with Network Rail was a good move but it preserved the contractual relationships with the operators and still continued to clearly separate infrastructure costs.  Overall I really don't think that can be a bad thing although I would certainly make some changes in NR if I was in the driving seat - but the last thing i would do is start to get too involved with TOCs, they simply don't have the knowledge base or indeed the financial incentive and no way would I be inclined to give them any sort of 'control' over the network.

 

MIke has drawn attention to how vertical integration doesn't work on SNCF and my experience of working directly with them for some years bears out exactly such a situation within that over-bureaucratic and highly inefficient organisation.  They employ some excellent people but in my, admittedly now dated experience, the weight of the organisation could stifle the brilliance of some of those (and I had regular dealings with two people who both subsequently became Regional Directors and who both were looking for change).

[Wigan Wallgate OO Gauge]

I'm worried that if maintainence schedules and repairs are purely down to the operators then they will put them back to as late a date as possible (keeping the line as profitable for as long before repair work) thus making it more dangerous. The good thing about Network Rail was that they didn't care about closing the track to carry out needed work as it didn't effect their profits whereas it will effect operators profits so they will put it back as much as possible which is pushing the limits for safety.

[TheSignalEngineer]

I fear that we will end up in the same state as our water system. As I drive around I am delayed at three or four different places every week by United Utilities digging up the road to fix water problems. Most are caused by years of neglect and under investment in keeping the system up to scratch just to please bean counters and shareholders. Doing that may be acceptable to the water industry but I hate to think of the consequences of applying the same principles to railway tracks or signalling. We have already seen it to an extent with incidents such as Lamington Viaduct, those will just be the tip of the iceberg - lucky escapes -  until we get another Clapham or Hatfield, then they will all be running around trying to shift the blame to the poor s*d on the ground 

[phil-b259]

So NR is our scapegoat for all the railways issues it seems!

 

Like I said on another thread - we are the nations whipping boys when it comes to the railways woes, probably because being a branch of Government on paper we are not able to defend ourselves effectively when Ministers go on the offensive.

 

In any case I smell a rat - all this talk of 'improving customer service' is more likely just a smokescreen for the Treasury to try and get NR put back where they think it belongs - the private sector.