Network Rail & TOCs - funding crisis & cost saving ideas (article dated 4 April 2017)

[Bristolrover]

Network Rail and TOC's facing funding crisis!

http://www.transport-network.co.uk/Network-Rail-facing-funding-crisis/13966

Network Rail is facing its largest funding crunch since the aftermath of the 2007/8 financial crisis, putting its supply chain in jeopardy and raising concerns over safety, according to reports.

The cuts will affect its ‘high output track renewals’ as well as potentially put a major strain on companies in the supply chain. Union officials have warned of threats to safety, although this has been strenuously denied by Network Rail.

There are reduced renewal plans on the South East route, from London across Kent, Surrey and Sussex, and on the Western route from London Paddington to Bristol and Penzance....

I'm new to posting, but with news like this and recent cuts to electrification, it seems things are only going one way.Worse services!

Do people have any ideas how Network rail and TOC's could make savings without impacting services?

 

[route:oxford]

Do people have any ideas how Network rail and TOC's could make savings without impacting services?

Easy, ensure that they TOCs remain in the private sector with long term franchise arrangements.

That way, the funding is planned and contracted for 7-20 years and no Chancellor is able to interfere with it during that period.

 

[LNW-GW Joint]

That piece is 4 months old.
Things have moved on since (not necessarily in a good way).
Network Rail won't run out of money for day-to-day maintenance.
Enhancements are another story.

 

[Andrew1395]

Reducing staff is the standard way of cutting costs quickly. Wages, national insurance, pension contributions, training costs all saved. Of course this means less work undertaken - reduce cleaning, reduce ticket checking, reduce admin support teams, cut out middle management, etc

 

[Blindtraveler]

Bring on the 20 year franchise I say, especially given the regularity that the administrative etc process of refranchising falls over.
Short term compensation for suppliers of different dubious cullered seat covers/carpets/vinal wraps may need to provided when they realise they woan get a call every 7 years.

In all seriousness, lets not cut staff on the ground, closing booking offices, cleaning trains less often and atempting to get rid of guards only serves to worsen the experience for the passenger, whilst the ticket he has bought continues to cost more. This is always assuming he can buy it due to the lack of guards or offices

Plenty managers around to sack and plenty used car dealerships for them to go work in instead. Sorry if your a railway manager but its about time someone asked the question of are you needed? I admit some are and they of course dont get culled.

I also would say reducing tlsome ticket prices, not so much advances but walkups would generate revenue not so much from commuters but less frequent travelers who might use the train as a way of having a night out 50 miles away and getting home the same night but due to cost find driving and booking a Travelodge works out cheeper, all be it slightly incompatible with my oft given piece of advice about staying in a Travelodge which is dont!

 

[LNW-GW Joint]

As described, the financial problems are at Network Rail, not the TOCs.
Renewals work is largely done by their contractors, so it is the supply chain that will be worst affected.
Firms like Carillion and Balfour Beatty will suffer.
The electrification bonanza that they tooled up for won't happen, either.
Re-signalling will probably be slowed, again affecting contractors, consultants and suppliers rather than Network Rail itself.

The TOCs are insulated by their franchise agreements and the access charging regime.
Firms like Stagecoach might be in trouble with VTEC, but generally the money-go-round will continue until franchises are renewed.
But new franchises may be less expansive and expensive in the future (fewer new trains etc), especially if passenger numbers drop (as they seem to be doing in London).
Sorry to mention it but there will be more emphasis on productivity improvement, such as with DOO and reduced staffing generally.

 

[DarloRich]

Network Rail and TOC's facing funding crisis!

http://www.transport-network.co.uk/Network-Rail-facing-funding-crisis/13966

I'm new to posting, but with news like this and recent cuts to electrification, it seems things are only going one way.Worse services!

Do people have any ideas how Network rail and TOC's could make savings without impacting services?

that is an old article referring to a specific part of NR and is now out of date.

 

[Moonshot]

Solution to Network Rails funding issues.....is to float it off to the private sector.

 

[edwin_m]

Seem to remember that went really well last time round... NOT!

 

[Moonshot]

Seem to remember that went really well last time round... NOT!

At least the Private Sector would be inheriting a much improved infrastructure network.....unlike Railtrack.

 

[broadgage]

Perhaps some innovative rolling stock is needed.
How about taking the frame of an old goods wagon, and bolting a bus body onto it.

Or for secondary routes, we could import some budget diesel railcars from Romania. Something like this perhaps.
https://www.youtube.com/watch?v=0zeBIxI7n1I

Note in particular the innovative "self reversing mechanism" that requires no space wasted on a cab at each end. We require more such innovation here.

 

[Clip]

Perhaps some innovative rolling stock is needed.
How about taking the frame of an old goods wagon, and bolting a bus body onto it.

Or for secondary routes, we could import some budget diesel railcars from Romania. Something like this perhaps.
https://www.youtube.com/watch?v=0zeBIxI7n1I

Note in particular the innovative "self reversing mechanism" that requires no space wasted on a cab at each end. We require more such innovation here.

that's amazing

 

[MarkyT]

Solution to Network Rails funding issues.....is to float it off to the private sector.

Seem to remember that went really well last time round... NOT!

They could give the mutual model another go . . .

 

[HH]

As described, the financial problems are at Network Rail, not the TOCs.
Renewals work is largely done by their contractors, so it is the supply chain that will be worst affected.
Firms like Carillion and Balfour Beatty will suffer.

Carillion are already in trouble...

 

[yorksrob]

At least the Private Sector would be inheriting a much improved infrastructure network.....unlike Railtrack.

Yes, off the back of public investment. Will private sector ownership be sustainable once those assets have depreciated (and public funding has dried up) or will it be stuck trying to make money out of an asset which requires more in capital investment than it makes in profit.

 

[Moonshot]

Yes, off the back of public investment. Will private sector ownership be sustainable once those assets have depreciated (and public funding has dried up) or will it be stuck trying to make money out of an asset which requires more in capital investment than it makes in profit.

Public funding drying up is the issue now affecting Network Rail.

 

[yorksrob]

Public funding drying up is the issue now affecting Network Rail.

It is, but it's not going to be any different for the private sector when it's trying to generate a profit off of an infrastructure which is fundamentally unprofitable.

And if the only way to make it work is to hand it back to the public sector in another forty years time for an injection of public funding/finance when today's sets have depreciated, then that's not sustainable.

NR's "magic credit card" only existed because it was ultimately Government backed. The private sector won't have the same privilege.

 

[HH]

It is, but it's not going to be any different for the private sector when it's trying to generate a profit off of an infrastructure which is fundamentally unprofitable.

And if the only way to make it work is to hand it back to the public sector in another forty years time for an injection of public funding/finance when today's sets have depreciated, then that's not sustainable.

NR's "magic credit card" only existed because it was ultimately Government backed. The private sector won't have the same privilege.

I concur; ultimately the majority of infrastructure funding has to lie with the public sector, just like roads.

And that's because they generally don't make a profit in the traditional sense. They do have economic and social benefits, which is why money is spent on them. It will probably never be enough, because the benefits are more nebulous than, say, extra schools or hospitals, when our hack politicians are on the political trail...

 

[Class 170101]

By the same token private business should not be allowed to lobby for new / improved infrastructure unless it comes with money attached to pay for it.

 

[coppercapped]

Public funding drying up is the issue now affecting Network Rail.

Er, not really. The settlement for this current 5 Year Plan (oops, sorry, Control Period) is the same as it always has been, some £38 billion for NR.

Two things have changed:

1. NR has burned through a lot of the budget for enhancements without delivering the goods, and
2. its access to private funding has been stopped following its classification as a nationalised concern so it now has to live within its means.

 

[HH]

Er, not really. The settlement for this current 5 Year Plan (oops, sorry, Control Period) is the same as it always has been, some £38 billion for NR.

Two things have changed:

1. NR has burned through a lot of the budget for enhancements without delivering the goods, and
2. its access to private funding has been stopped following its classification as a nationalised concern so it now has to live within its means.

I'm sure that you're right on 2; I had already expressed concern of where NR's debt was heading previously. Can you point to anything that supports your first point? I suspect that it's true, but I do so like facts...

 

[LNW-GW Joint]

I'm sure that you're right on 2; I had already expressed concern of where NR's debt was heading previously. Can you point to anything that supports your first point? I suspect that it's true, but I do so like facts...

Isn't it the reason for deferring many projects?
All the electrification schemes are over budget, some hugely so.
Signalling schemes keep getting pushed to the right (Bristol, Oxford, and several smaller schemes which are part of the ROC migration projects).
GWML/ECML ETCS rollout (scope reduced).
The Picc/Oxford Road upgrade.
ECML upgrades (eg 4-tracking, grade separation).
East West Rail (no date/cost).
A long list, quite apart from electrification schemes.

The other Catch 22 is that the ROC migration programme was intended to reduce the cost of operating the network.
They are well behind the plan, so the operating costs are higher than planned, and so CP6 will start with higher costs.
Delaying the migration (ie not investing the capital) has a double whammy on the revenue budget.

 

[edwin_m]

Isn't it the reason for deferring many projects?
All the electrification schemes are over budget, some hugely so.
Signalling schemes keep getting pushed to the right (Bristol, Oxford, and several smaller schemes which are part of the ROC migration projects).
GWML/ECML ETCS rollout (scope reduced).
The Picc/Oxford Road upgrade.
ECML upgrades (eg 4-tracking, grade separation).
East West Rail (no date/cost).
A long list, quite apart from electrification schemes.

The other Catch 22 is that the ROC migration programme was intended to reduce the cost of operating the network.
They are well behind the plan, so the operating costs are higher than planned, and so CP6 will start with higher costs.
Delaying the migration (ie not investing the capital) has a double whammy on the revenue budget.

Interesting thought. Are the problems attributed to electrification actually all about signalling? No re-signalling at Bristol and Oxford, so can't electrify. Signalling not done before electrification elsewhere on GWML, so signal cables in unknown positions are still in use when pile driving starts.

 

[LNW-GW Joint]

Interesting thought. Are the problems attributed to electrification actually all about signalling? No re-signalling at Bristol and Oxford, so can't electrify. Signalling not done before electrification elsewhere on GWML, so signal cables in unknown positions are still in use when pile driving starts.

It's a good question whether the wiring would be any further advanced if the resignalling was already completed (or at least compatible with OHLE).
Possibly we might be seeing wires reach Bristol TM, but not Cardiff (where resignalling is already complete).
Oxford seems to be mired in design issues over the layout, not just resignalling.

But I think the wiring constraints would still be there, just in different places.
The cost escalation is also apparent in both projects - a double whammy really.

 

[godfreycomplex]

Perhaps some innovative rolling stock is needed.
How about taking the frame of an old goods wagon, and bolting a bus body onto it.

Or for secondary routes, we could import some budget diesel railcars from Romania. Something like this perhaps.
https://www.youtube.com/watch?v=0zeBIxI7n1I

Note in particular the innovative "self reversing mechanism" that requires no space wasted on a cab at each end. We require more such innovation here.

Goodness me...
The use of a siren from a toy ambulance is particularly fascinating. I wonder if you could plug a CIS display into the fag lighter?
I might have to go and have a look at that line, looks tremendous fun!

Oh yes, we were talking about how ghastly Network Rail are for not being able to keep up with the DfT's bizarre bucket list to have everywhere wth LED signals that aren't any more reliable or closer together than the old ones on a budget that would probably struggle to pay for the aforementioned transit van
Sorry, I've just come off nights....

 

[Olaf]

Network Rail and TOC's facing funding crisis!

http://www.transport-network.co.uk/Network-Rail-facing-funding-crisis/13966

I'm new to posting, but with news like this and recent cuts to electrification, it seems things are only going one way.Worse services!

Do people have any ideas how Network rail and TOC's could make savings without impacting services?

Both NR and TOCs are contracted for specific level of services, so they will be obliged to maintain the level of service.

The DfT has advised that there will be sufficient funds made available for maintenance of operations, however there is a report being produced about NR efficiency improvements and that should come out in October/November. That will be used to determine how NR is to reduce costs in CP6.

In terms of enhancements - it is looking a little bleak; HS2 is going ahead but it does not look like the projected costs are fully covered. CR2 is also being reviewed to cut costs. The problem now is that it is not clear what funding can be made available for the next 5 - 10 years (Brexit, Global recession, unserviced demands from other departments) so that leaves every enhancement project going through a very though cost/benefit analysis so that only the most beneficial projects get go ahead. Having said that, there will probably still be funds for safety, level-crossings, universal access, SFN etc. Hopes are now being placed on the Digital Railway initiative to address service and capacity requirements.

Just to add:
- There is still the option to change the funding structures so that more of the public funding goes via the TOCs,
- Ticketing, Information, and Systems technology will inevitably lead to elimination of the old way of doing things in the same way that technology has changed other industries.

 

[yorksrob]

The first change should be to make the road budget pay for level crossing enhancements and closures, but then I've said that already.

 

[HH]

My view, as someone who sees the workings of Network Rail occasionally, is that there are issues I have identified that increase costs:

1. They have far too many people on projects; they get in each other's way and they all want to "add value".

2. There is way too much bureaucracy with multiple checks on everything; all these 'man markers' have to be paid for.

3. There is competition between routes and projects, etc. etc. meaning worse than just duplicated effort, they often work at cross purposes.

4. There are many senior managers at Network Rail who don't even know what their company does. Strange, but true. Often, buried somewhere in NR is someone who could solve a problem elsewhere, but nobody knows...

 

[edwin_m]

To which I'd add multiple layers of standards (TSI, ORR, RSSB, NR itself) and a culture of compliance rather than challenge.

 

[snowball]

The first change should be to make the road budget pay for level crossing enhancements and closures, but then I've said that already.

Then they'd probably stop happening, because local authorities are mostly strapped for cash.

There's no such thing as the road budget. There's the trunk roads budget and there are local authority budgets. But there are virtually no level crossings left on trunk roads.