ORR report following Network Rail's investigation into delivery of enhancements

[DaveNewcastle]

The Office of Rail and Road (ORR) published its findings on Friday 16th Oct from its investigation into Network Rail's performance after multiple deadlines were missed in the ambition programme of capacity improvements in the current control period.

Network Rail is taking immediate action to improve planning and delivery of rail enhancements

16 October 2015

Network Rail is taking action to improve planning and delivery of rail enhancements, the Office of Rail and Road (ORR) concluded today. This follows the regulator's investigation into the company's delivery of a multi-billion pound enhancement programme on Britain's railways.

Network Rail committed to deliver a challenging £13bn enhancements portfolio to improve performance and capacity on Britain's railways, in its current funding period between 2014-2019. In November 2014, ORR raised concerns about project deliverability and cost increases, and after a significant number of milestones were missed, launched an investigation in March 2015 to understand the reasons for enhancements going wrong.

ORR's investigation found systemic weaknesses in Network Rail's handling of its enhancement programme including poor processes for setting initial project requirements, no defined framework for managing complex programmes, a lack of portfolio management capability and low productivity. Together these issues have resulted in significant underestimates of project timescales, and impacted on operational performance and costs.

In response to ORR's investigation findings, Network Rail has worked with the regulator to identify and address its weaknesses through the development of an enhancement improvement plan. The plan will drive improvements in the way Network Rail manages its relationships with project sponsors, ensure safety is considered at a design stage, and reform how costs and risks are estimated, alongside changes in project governance, deliverability assessment and monitoring.

ORR will hold Network Rail to account for delivering the improvements needed, ensuring the plan is fit for purpose and put into practice. While it will be a significant and long-term challenge for the company to integrate and embed the improvements into business as usual, they are essential to protect the investment which is being funded by taxpayers, passengers and freight customers.

[more . . . . . ]

Full media summary : http://orr.gov.uk/news-and-media/press-releases/2015/network-rail-is-taking-immediate-action-to-improve-planning-and-delivery-of-rail-enhancements

 

[LNW-GW Joint]

The detailed ORR report linked above is at: http://orr.gov.uk/__data/assets/pdf_file/0020/19505/enhancements-evidence-report-october-2015.pdf
It gets closer to the nub of why major projects are slipping, such as (p41):

4.71 Nichols completed the review in July 2015. The findings were clear - there is no uniform NR approach for major infrastructure programmes delivering complex timetable changes. This has resulted in each programme effectively starting with “a blank sheet of paper”, with varying results across the different programmes.

In several places it says NR has not learnt the lessons from the WCRM and Thameslink projects.
The overall impression is that NR is overwhelmed with the process of managing a large number of major projects concurrently.
I get the impression that this will not be resolved quickly, and the best we can hope is that CP6 enhancements will follow a different tack.
The final analysis has this discouraging statement (p48):

5.8 In conclusion, the drafting and development of the EIP initiated in November 2014 has continued throughout this formal investigation. NR’s improvement plan is finally taking shape, but it is not yet sufficiently finalised. The EIP is appropriately aimed to address the systemic weaknesses currently within NR. But it demands significant changes to NR’s processes, systems, culture, capability and behaviours across many parts of the company. This will take time, extended by NR’s slow response to our initial concerns. Earlier opportunities to develop and implement the necessary corrective actions more speedily were missed. Until the benefits of these improvements are delivered, it is probable that further regulated milestones will be missed.

Network Rail's plan in response to this should be published in November.
This is no doubt only the first of several kickings aimed at NR in the next few months.

 

[The Planner]

Oh joy, time to prepare for a re-org all over the show....

 

[Class 170101]

Oh joy, time to prepare for a re-org all over the show....

Some NR are good at and seem to do about every 18 months. :roll:

 

[Diplodicus]

Network Rail's plan in response to this should be published in November.

Let me save them the effort: "Lessons have been learned... Blah blah blah... new safeguards have been put in place ... blah blah ... team has been strengthened ..."

 

[Ships]

Some NR are good at and seem to do about every 18 months. :roll:

Pah more like every 6-12 months.....

 

[DarloRich]

Oh joy, time to prepare for a re-org all over the show....

just wait for the Shaw report............

 

[snowball]

Some NR are good at and seem to do about every 18 months. :roll:

But the next one will be imposed from without.

 

[The Planner]

just wait for the Shaw report............

Heard nasty rumours about that already as apparently it is already doing the rounds upon high.

 

[HowardGWR]

It strikes me that all these reports and typical lawyers' dream fodder is designed just to strengthen a case for privatisation. I'm not claiming that would be good or bad; simply that the Dame lady will doubtless recommend that.

 

[moggie]

It strikes me that all these reports and typical lawyers' dream fodder is designed just to strengthen a case for privatisation. I'm not claiming that would be good or bad; simply that the Dame lady will doubtless recommend that.

Of course it is. You have to rubbish the existing to justify the new. What ORR fail to explain is how, with the absence of any effective structured planning NR manage to implement any project on time and on budget which of course they do - more often than not.

How the whole process is affected by the input of numerous private sector programme managers and contractors on all major NR projects - presumably that's all OK as it isn't mentioned?

What impact the ORR's own actions are having on NR's ability to deliver a huge work programme against the challenging budgetary requirements imposed by ORR / DfT.

Of course, none of that matters when NR in their current form are dead men walking. Long live son(s) of NR and of course their supply chain.

Tories, dontya just luv 'em. Big promises, no ideas, no lessons learned from recent history of fiddling while the network deteriorates. Just leave it to the next administration to clear up the wreckage or just let it wither and die.

 

[MarkRedon]

I largely agree with the previous poster. However, there appears to be a significant difference between the performance of Network Rail in CP4 and that which they are currently achieving in CP5. I would identify three significant factors; perhaps others more knowledgeable than I can contribute?

1. CP5 includes the first major electrification projects in England for a generation. Network Rail as purchaser and the engineering companies as providers have little recent experience of major rail electrification projects. Furthermore, the state of the existing assets and knowledge concerning them has been lacking – apparently a major factor in cost overruns on the Great Western.
2. The end of the virtual blank cheques which were provided by having an independent capital borrowing facility available to Network Rail. I note that the change of status of Network Rail was forced by a change in the rules on public sector debt which originated from the European Commission, the Brussels civil service. That august body has a very strong "liberal" (almost neo-con) economic outlook – quite possibly associated with the number of British economists who work within it? They have wanted to bear down on and counter the tendency, common in European countries, for governments to subsidise a sometimes-inefficient public sector by means of disguised "capital" funding. Whence the change of rules, then the change of status of Network Rail, and some of the current woes.
3. Another factor I would identify is that the really big engineering companies have seen rail, in the UK and elsewhere, as an easy way to make steady and significant returns. Steady, because the projects are long-term. Significant, because sometimes the purchaser and the buyer have had common interest in a little bit of goldplating.

I sincerely hope that the Shaw report and the Tory government will avoid simplistic solutions, the worst of which would be a return to Railtrack.

One detail in the ORR findings which distinctly worries me is the significant overspend on the East-West project even before phase 2 (Bicester to Bletchley) gets really started. That suggests that the Oxford to Marylebone "new" railway has cost a lot more than it ought to have done. Why? And what can be done to reduce costs on future projects?