Break up of Network Rail?

[DarloRich]

Enormous sums are being wasted through poor and inadequate design which is procured from the cheapest suppliers, to poor quality specifications.

Poor quality tenders raise more questions than they answer resulting in lots of TQs and much qualification.

Totally inept and unnecessary "project management" is applied when there is no need, and Contracts are awarded on the hub and spoke principle which was demonstrably flawed when first used and continues to create barriers, inefficiencies and destroys inter-company co-operation.

The only purpose of Hub and Spoke is to give "power" to the client organisation to bully its Contractors. Sophisticated cleints run a mile from any suggestion of hub and spoke. The whole process is then overseen by co-ordination teams who simply second-guess the Contractors and create blocks to co-operation. Companies are forbidden to talk to one another as Network Rail and its Projects orgainsation has a total paranoia that the Companies will conspire aginst it. You really couldn't make it up, and if the organisation was a human being it would have been consigned to a highly secure mental institution a long while ago.

Afraid i have to disagree with this point - this is just not the case. I do not recognise this as a definition or description of the work undertaken by NR. It IS the view many people in the media like to portray.

The power SHOULD rest with NR, they are responsible for the infrastructure and are spending your money to improve/enhance and maintain the network. They have been taken for a ride in the past by contractors but that has changed. Contract values/costs are being screwed down as far as possible and there is a view held by many within NR that they have not been harsh ENOUGH with suppliers/contractors.

many more people have been brought in form outside of the railway who have brought a sensible commercial approach to both project planning, management and contractual control.

As for sophisticated clients running a mile, well if they do most of them keep running back when the next tender documents are issued! They know that in the past they have been able to make a killing.

Finally, NR are under massive pressure to cut costs across the board, including project costs. They have driven down costs but it has taken time, simply because of the hydra they have had to battle with. There have been savings and efficiency, but more work is needed. The cheapest suppliers are not always used, however price, in these financially trough times, is always going to be the key. It is your money they are spending after all.

I hope you don't see this as a personal attack OT - i agree with much of what you write, particularly on privatization, but the NR i know is not like the one you present. Perhaps we have had dealings with different areas/teams! Perhaps I have been lucky!

 

[Old Timer]

Afraid i have to disagree with this point - this is just not the case. I do not recognise this as a definition or description of the work undertaken by NR. It IS the view many people in the media like to portray.

The power SHOULD rest with NR, they are responsible for the infrastructure and are spending your money to improve/enhance and maintain the network. They have been taken for a ride in the past by contractors but that has changed. Contract values/costs are being screwed down as far as possible and there is a view held by many within NR that they have not been harsh ENOUGH with suppliers/contractors.

many more people have been brought in form outside of the railway who have brought a sensible commercial approach to both project planning, management and contractual control.

As for sophisticated clients running a mile, well if they do most of them keep running back when the next tender documents are issued! They know that in the past they have been able to make a killing.

Finally, NR are under massive pressure to cut costs across the board, including project costs. They have driven down costs but it has taken time, simply because of the hydra they have had to battle with. There have been savings and efficiency, but more work is needed. The cheapest suppliers are not always used, however price, in these financially trough times, is always going to be the key. It is your money they are spending after all.

I hope you don't see this as a personal attack OT - i agree with much of what you write, particularly on privatization, but the NR i know is not like the one you present. Perhaps we have had dealings with different areas/teams! Perhaps I have been lucky!

I really dont know where to even start to reply. Maybe I should ask you to read the CDM Regulations and in particular who can be a Principal Contractor and their duties and responsibilities. Then look at how Network Rail seek to involve themselves in these duties.

I spent 16 years working under the Railtrack / Network Rail regime, and I think I have seen most of it.

Your answer suggests very much someone who has been brought into Network Rail in recent years from outside the Industry and put through the NR training centre.

Many of your arguments are exactly those which Network Rail pushed when they took maintenance in-house, yet maintenance now costs more, is done less well, there are increasing incidents and derailments which are donw to poor standards of maintenance, and Network Rail staff continue to get hurt at work because the corporate culture is performance above all. Go back and look at some of the posts made on here by Network Rail maintenance staff.

As for tenders are you in procurement or have you ever had to respond to one ? Amey Rail walked away from bidding for GARL stating it was too high risk.

Other Contractors have declined to tender for other jobs.

What apologists for Network Rail fail to ever point out when they quote about Contractors making high margins is that this was because Network Rail failed to meet its Contractual obligations. If you as abusiness sign up to letting me have access and the running your train service so that I lose the construction window, then sorry but you have to pay the costs of that. It is not for me to bear the costs of your inability to manage your operations.

Similarly I once made 80% profit on a job that has been planned and staged by Network Rail engineers from a design package developed by Network rail designers. I was actually able to install and commission over one weekend not five. I had been instructed to tender against the specification, and I did so. Had Network Rail engineers been Railway engineers not those brought in from a non-railway organisation then they would have seen what I did. Why should I be expected to only claim what it costs when NR insisted it was fixed price against the spec, which you should know is Contractually how jobs have to be priced and awarded, yet I would NOT be entitled to claim for any failures on my part ?

You can have your cake and eat it - not both.

Let us talk of another situation where Network Rail INSTRUCTED me to recover and cut up brand new S&C, or yet another case where they INSTRUCTED me in WRITING to renew a track which had recently been renewed and protested to my MD when I tried to point out that they meant the other line. They then tried to blame US even though we were still debating the original point of being asked to do the wrong line.

I could go on with example after example of this sort of imcompetence made worse by Network Rail's approach to its Contractors, which is akin to treating us like something rather unpleasant that has been trodden in. Something I understand learnt at Westwood.

 

[DarloRich]

I think what you says HAS been the case until recently. Things have changed. I have come in from the outside world and some of the practices and arrangements wouldn't last five minutes if NR wasn't a quasi public company. If i was on the contractors side i would be laughing all the way to the bank! I have dealt with large value contracts, both drafting and disputes (before a total career change) and those used by NR have been very poorly drafted to say the least, at least until recently.

I agree that control, in the past, has often been poor. There have been far too many overruns of both cost and possessions and things have been and continue to be far too expensive. This has changed, at least in the section i work for. However it will take time to get it right.

I know that i do not treat contractors like something i have trodden in. I try to build relationships with them all. It helps to get things done. However, there are only a limited number of contractors we can use for the projects i deal with (perhaps at most 5) which means it is quite easy to build up good relations. I deal mostly with rolling stock projects

I don't know which part of NR you have had most dealings with but it doesn't sound like the section i work for. Those problems you highlighted are disgraceful and i hope they were referred up the chain. Problems like that need to be sorted out and quickly or everything else NR is trying to do is for nothing

 

[WatcherZero]

I was under the impression that under their 27% cost cutting program of the last five years they had taken 80% of work inhouse and only 20% was being contracted out anymore, however the cuts must now be through efficency rather than contracts (indeed they claim to have cut £200m and 1100 jobs over the last 6 months and will cut another £400m over the next couple of years). But then I dont directly work for NR so I dont know firsthand.

 

[Old Timer]

I was under the impression that under their 27% cost cutting program of the last five years they had taken 80% of work inhouse and only 20% was being contracted out anymore, however the cuts must now be through efficency rather than contracts (indeed they claim to have cut £200m and 1100 jobs over the last 6 months and will cut another £400m over the next couple of years). But then I dont directly work for NR so I dont know firsthand.

They continue to take out front line maintenance positions whilst at the same time they are increasing their "projects" organisation.

Money is being saved by deferring renewals, yet the track is being "maintained" to a lower standard than before by fewer men.

The use of cheap labour suppliers increases.

Savings are now only achieved by downscoping track and S&C renewals. For example the new UIC 60 rail section has been stopped on S&C jobs and it is back to 113lb S&C. This will not allow the increase in speeds and tonnages expected. It is simply a cheap way of getting a shorter life renewal.

There is no intelligent management simply a retrenchment to bully boy tactics and the use of Hub and Spoke procurement which does not work, but is merely used to rule through divide and rule tactics.

 

[yorksrob]

You miss my point.

This was that the money spent on enhancements, new rolling stock, electrification, resignalling, etc, etc could NEVER have been found fron HM Treasury sources, unless spending on the other state operated services was cut.

Apologies for this Old Timer - I know you've moved on to other things. It's just that when you mention the enhancements, I can remember BR doing all of these things quite regularly. Infact, it was happenning around me to a large extent, so presumably this must have come from the public purse.

So to suggest that such enhancements can never have come from the treasury can - to my untrained eye, mean one of two things:

One - Either the Government would have massively cut the railway budget - and I know it did try to cut the railway budget at first - mainly I suspect because it thought that privatisation would let it get away with it, but as we all know for most of the past ten years the public railway budget has actually been very high, suggesting that had the Governments continued investing similar amounts as before, there would have been a continuing, although probably not spectacular, renewal of the railway. or,

Two - There has been a massive inflation in the cost of these things - together, possibly with that of running the railway as a whole, in which case I suppose it's a question of how much of this is due to costs from outside , for example legislation etc, and how much is due to the structures imposed since privatisation - and your observations of Network Rail would certainly suggest that those structures may indeed be a factor.

I'm coming from an outsider's perspective admittedly, but I don't think it's an idiotic question to ponder.

 

[Old Timer]

Apologies for this Old Timer - I know you've moved on to other things. It's just that when you mention the enhancements, I can remember BR doing all of these things quite regularly. Infact, it was happenning around me to a large extent, so presumably this must have come from the public purse.

So to suggest that such enhancements can never have come from the treasury can - to my untrained eye, mean one of two things:

One - Either the Government would have massively cut the railway budget - and I know it did try to cut the railway budget at first - mainly I suspect because it thought that privatisation would let it get away with it, but as we all know for most of the past ten years the public railway budget has actually been very high, suggesting that had the Governments continued investing similar amounts as before, there would have been a continuing, although probably not spectacular, renewal of the railway. or,

Two - There has been a massive inflation in the cost of these things - together, possibly with that of running the railway as a whole, in which case I suppose it's a question of how much of this is due to costs from outside , for example legislation etc, and how much is due to the structures imposed since privatisation - and your observations of Network Rail would certainly suggest that those structures may indeed be a factor.

I'm coming from an outsider's perspective admittedly, but I don't think it's an idiotic question to ponder.

Not an idiotic question at all.

The difference was that in 1994 PFI was in its infancy and certainly was not intended to operate in the same way as it later did.

From 1997 there was an explosion in PFI but the difference was that Labour changed the accountancy rules to take PFI liabilities out of the public view. By not including PFI liabilities this enabled more money to be borrowed than would have been the case under the previous Conservative Government. In addition, Labour continued and actually increased the sale of public assets. A quick check will reveal that the greatest value of public assets was sold off from 1997.

I agree that the money spent on the Industry since 1997 far exceeds what we would have had under the previous Government, and I have no doubt that we would have had a very much chnaged public Railway.

I remain sceptical however that a number of things would have changed. Privatisation has at least seen the removal of the incompetent, the lazy, and the undesirables who were "protected" under BR by the medium of the Trades Unions.

Had we had many of the people we now used to have in recent years then we would have had a very efficient and good Railway. Unfortunately these guys only got their opportunity to shine because Privatisation and the rigours of the private sector enabled them to rise up and develop their skills.

Overseas anyone with BR and UK Infrastructure Contractor experience is highly sought after by emerging Railways and Railroads, and the Australians for example have permanent staff in the UK regularly trawling through looking for these types of staff. ironically they are cleaning out the same resource pool that Network Rail is filling through sackings and redundancies because most ex BR and Infrastructure Contractors staff do not fit the profile of the people they wish to employ.

 

[Hydro]

I can definitely think of one section of NR recently taken in-house that quality of output has seriously suffered compared to when it was contracted out. The day to day operation has also seriously declined. Previous operator rhymes with "Murco".

Network Rail is a seedy businessmans wet dream.

 

[tbtc]

Enormous sums are being wasted through poor and inadequate design which is procured from the cheapest suppliers, to poor quality specifications.

Poor quality tenders raise more questions than they answer resulting in lots of TQs and much qualification.

Totally inept and unnecessary "project management" is applied when there is no need, and Contracts are awarded on the hub and spoke principle which was demonstrably flawed when first used and continues to create barriers, inefficiencies and destroys inter-company co-operation.

The only purpose of Hub and Spoke is to give "power" to the client organisation to bully its Contractors. Sophisticated cleints run a mile from any suggestion of hub and spoke. The whole process is then overseen by co-ordination teams who simply second-guess the Contractors and create blocks to co-operation. Companies are forbidden to talk to one another as Network Rail and its Projects orgainsation has a total paranoia that the Companies will conspire aginst it. You really couldn't make it up, and if the organisation was a human being it would have been consigned to a highly secure mental institution a long while ago.

You've summed up one of my biggest problems with the railways there.

We seem to be spending more and getting less (and at a poor quality too).

We need to sort out the appalling waste going on. I honestly thought (at the time) that Network Rail was the way forward. I thought that, after Railtrack and the lessons learned, things would improve. I was wrong. And until someone comes along and sorts out the confusing structures, overlapping remits, top-heavy-beaurocracies, form filling culture, poor money-management and wasteful spending then we'll never sort the railways out.

 

[yorksrob]

Not an idiotic question at all.

The difference was that in 1994 PFI was in its infancy and certainly was not intended to operate in the same way as it later did.

From 1997 there was an explosion in PFI but the difference was that Labour changed the accountancy rules to take PFI liabilities out of the public view. By not including PFI liabilities this enabled more money to be borrowed than would have been the case under the previous Conservative Government. In addition, Labour continued and actually increased the sale of public assets. A quick check will reveal that the greatest value of public assets was sold off from 1997.

I agree that the money spent on the Industry since 1997 far exceeds what we would have had under the previous Government, and I have no doubt that we would have had a very much chnaged public Railway.

I remain sceptical however that a number of things would have changed. Privatisation has at least seen the removal of the incompetent, the lazy, and the undesirables who were "protected" under BR by the medium of the Trades Unions.

Had we had many of the people we now used to have in recent years then we would have had a very efficient and good Railway. Unfortunately these guys only got their opportunity to shine because Privatisation and the rigours of the private sector enabled them to rise up and develop their skills.

Overseas anyone with BR and UK Infrastructure Contractor experience is highly sought after by emerging Railways and Railroads, and the Australians for example have permanent staff in the UK regularly trawling through looking for these types of staff. ironically they are cleaning out the same resource pool that Network Rail is filling through sackings and redundancies because most ex BR and Infrastructure Contractors staff do not fit the profile of the people they wish to employ.

Sceptical though I am about the privatisation of loss making public services, I do feel that had they chosen a vertically integrated system in the first place, as suggested by yourself, we would probably have a much better system than the present one by now.