Rail reform: Well-linked supply chains can deliver

Network Rail's devolution of route operations and government's hopes for more vertical integration of train and track present opportunities that can and must be grasped, says Russell Jackson.

Last week the transport secretary promised to put passengers at the heart of the railway, announcing plans to bring back greater integration between track and train operations. The announcement aligns with Network Rail’s own significant shift of focus towards the customer. In future rail renewals, enhancements and maintenance are likely to be planned and delivered to achieve outcomes that consider implications for train operations. The announcement did not, however, set out the wide-scale implementation of such an approach, instead focusing on three targeted proposals. 

Plans to create new, collaborative franchises on the South Eastern and East Midlands routes and the establishment of a separate East West Rail organisation will clearly move the industry further on a journey towards more vertical integration. With the future Wales and Borders franchise, the UK railway is already exploring how to unlock these efficiencies. But as these plans for more joined-up working between track and train operations progress, it is important that industry does not dwell on why this type of arrangement failed to work in previous decades.

The rail sector now operates in a very different environment and the focus must be on realising this ambition, learning lessons from what has and has not worked previously. The rail supply chain has a key role to play in the success of these types of new programmes.  

Building combined delivery teams with shared goals that are focused on the needs of passengers helps foster innovation and drive efficiencies. Network Rail’s alliancing model has been introduced on a number of its recent major enhancement and renewal programmes with considerable success, in track renewals and the Northern Hub project, for example.

Combined delivery teams jointly responsible for strategic leadership are focused on shared incentives and project outcomes that benefit the passenger through less disruption and greater reliability. This model also helps deliver a railway that continues to drive the world-leading safety standards that our industry excels at. The new arrangements announced last week will require a similar approach. 

Integrated operations between train services and infrastructure are more common overseas and there are lessons that can be learned from other countries. Different contracting arrangements from around the world might not always be appropriate for the UK market, but managing risk is a common element that will be crucial for achieving industry-leading safety levels, value for money, high levels of reliability and minimal disruption.

A better understanding of the risks associated with cost at the early development stages of enhancement programmes is key. There is much to be learned from global projects about creating optimised early estimates that rigorously manage the risks and assumptions inevitable in the early stages of development. 

While the Transport Secretary called his recent statement to Parliament ‘Rail reform: future of the rail network’, the creation of East West Rail is not such a giant leap from previous arrangements. This philosophy is a natural progression from Chiltern Railways’ Evergreen programme. Forward-thinking train operating companies understand the power of improvements to generate more passenger journeys, including how short-term disruptions for passengers can achieve long-term benefits.

The benefits to local economies are hugely attractive to local and regional government. Applying integrated thinking to programmes such as the new link between Oxford and Cambridge will help deliver better outcomes for passengers and the local economy. 

Fresh thinking will be more important than ever as the devolution of the UK’s rail network progresses in parallel with a renewed focus on vertical integration. Route directors, train franchise operators and combined delivery teams will need to link capital project performance and wider long-term outcomes in order to attract more passengers and achieve increased modal shift from road to rail. Key to achieving this will be to understand how rail routes can help drive regional economic growth. Using new stations and lines to unlock opportunities for additional housing and business developments should be a priority, not a secondary objective for devolution. It is the role of the rail industry to ensure it drives the scope of capital projects to achieve these greater outcomes.

While government has focused on three initial programmes, the announcement last week sets the rail sector more clearly on this path. Further integration between train and track operations on additional routes is now possible. Industry must grasp the opportunities that arise from this shift and learn from previous challenges as it gears up for the delivery of new franchises and programmes of rail enhancement and renewal.  

Russell Jackson is head of rail for the UK, Ireland and Continental Europe, AECOM.