Without doubt, the Railway Industry Association (RIA) represents a significant membership of companies engaged in supplying the rail industry, covering a multitude of different engineering disciplines. Darren Caplan, the chief executive of RIA, stated at its recent annual conference that the industry contributes £36 billion to the economy with over 600,000 employees, both of which are impressive numbers.
A short introductory video showcased a number of companies that contribute with design, project and implementation activities and demonstrated the need for a pro-active and innovative supply chain to meet the increasing technological demands of an expanding and busy railway. However, as Darren explained in his opening address, four factors make these uncertain times.
Firstly, the big message coming across from RIA member companies is the problem of ‘boom and bust’ with project funding. Not having a steady work stream leads to recruitment uncertainty and the knock-on effect of having to acquire the right calibre of people when contracts are awarded only to make them redundant again when contracts are completed, all causing an increase in cost and delivery delay.
Secondly, whilst prestige projects such as HS2, Crossrail, National Electrification, Digital Railway and others are welcome, there is little in the way of co-ordination between them to ensure the available resources and skills are effectively distributed.
Thirdly, whilst funding is given to R&D for infrastructure innovation, no equivalent money is available for rolling stock development. The goal of decarbonisation by 2040 will require continued investment in electrification (although the cost of achieving this has to be brought down) and innovative new rolling stock – not only bi-mode of electric/diesel but battery technology and hydrogen as well. Some companies are already engaged in this, but very much as a speculative venture with no certainty of end-user acceptability.
Fourthly, a satisfactory Brexit is crucial for the rail industry to continue close ongoing technical co-operation with Europe. Around 20 per cent of the UK workforce is made up of mainland European employees and their expertise must not be lost. The UK has excellent export potential and frictionless trade is essential.
The political dimension
The compere for the conference was David Begg, now the chief executive of Transport Times but well known for his transport thinking at Edinburgh University over many years. He recalled the success of the ‘Save our Railway’ campaign in the 1990s, when retrenchment of the network was a real threat. Privatisation has brought an increase in ridership and the resulting big investment projects. HS2 to Birmingham is just about assured, but David suggested that doubts may still exist with stage 2b to Leeds and Manchester.
Having the Secretary of State for Transport, Chris Grayling, as a speaker was a real bonus in these uncertain times. His enthusiasm for transport in general came across, but he is adamant that value for money has to be achieved. No more so is this reflected than in electrification projects, where both costs and timescale have spiralled out of control, on the Great Western in particular.
Chris Grayling was pleased that many good things are coming out of the industry, as witnessed by UK showings at the recent InnoTrans exhibition in Berlin. However, more new thinking is required for the whole railway. New propulsion methods cannot be ignored, witness hydrogen and hybrid train projects in Germany, which could be ideal for the East – West Railway from Oxford to Cambridge, essentially a commuter railway in the making.
Digital railway techniques should provide a solution to many of the current capacity problems. The money is there – but the processes for spending it must be speeded up to ensure investment in new technology and innovation is spent wisely.
The forthcoming Rail Review, whilst concentrating on the franchising model, will aim to produce a joined-up railway, something that has to be a team effort. The industry will change shape and the supply chain must be part of that, and there is a danger that the customers – the travelling public and freight users – have become forgotten with too much focus being placed on engineering for its own sake. The Trans Pennine upgrade from Leeds to Manchester is predicting line closures of 39 weeks per year for the next five years, which is unacceptable.
The clamour for ‘boom and bust’ removal is noted but the industry should not expect safe and secure business for all time from government. While there is no shortage of work in the UK at present, with many schemes underway (Trans Pennine, Ely Junction, Dawlish consolidation, East-West rail to name but a few), huge opportunities also exist in other countries around the world and the government will support companies that engage with this – Chris Grayling even offered to make ministerial visits if the situation merited it. Despite the problems of 2018 – electrification delay, timetable introduction, Crossrail – all caused by ‘it will be alright on the night’ thinking – more opportunities exist for rail than at any time in the past with considerable private investment adding to central funding of £48 billion for CP6.
HS2 is crucial, but it should be viewed as a series of bypasses to free up space on the existing railway rather than having high speed as its primary aim. The industry has to be better at making the case for HS2, where state of the art technology and increased speed is only sensible. The project will not be micromanaged by government and it is up to big companies to support smaller firms down the supply chain.
Calls for a vertically integrated railway will be considered in the current Rail Review, led by Keith Williams, but wholesale nationalisation will only suck private investment out of the industry. Greater employee participation in the industry’s future will help de-militarise the present conflicts.
Andy McDonald, the shadow secretary for transport, exposed some of the myths about the opposition’s view on rail. Nationalisation will only apply to the TOCs, and only then on franchise expiry. He claimed that the evidence in support of this is overwhelming, using Virgin East Coast and the forthcoming bailout of Anglia to demonstrate that the system is not fit for purpose.
The announced Rail Review will not look at Network Rail, existing franchises or the ORR, and Andy MacDonald doesn’t believe it is needed to show up the main shortcomings. Labour has no intention to nationalise any part of the supply chain, indeed a strong supply industry is recognised as vital. A joined-up railway is the prime objective, with timetable compilation and regular asset maintenance being the mainstay of this.
A Labour government will create a public company to run the railways, with the remit of less expensive fares, easier through-journeys and close co-operation with local authorities. Control periods will be of seven years duration, with planning for the next period taking place two years before expiry of the existing one to ensure the relevant feedback and lessons are understood.
The ceasing of the electrification schemes is viewed as a major error, although the cost for new projects must be reduced. Key to part of this is the continuance of the National Skills Academy for Rail with measures put in to retain skilled staff within the industry.
On Brexit, Labour respects the referendum result despite the appalling handling of subsequent negotiations, but would maintain a customs union with the rest of Europe.
Whilst not advocating a return to British Rail, that era of industry did achieve results with minimum money. Some lessons from the past need re-learning. Railways need less political interference and should be left to the rail experts. Network Rail is far from perfect, with costs being too high, not helped by the industry fragmentation. The Digital Railway vision is supported, but the digital platforms must be much more than just the roll out of ETCS.
Conference attendees reflecting on the two political viewpoints might even consider that they are not so very different, at least for the longer-term vision.
Regional clamour for a less London-centric investment approach is often vocal, but is this factual, or even fair? Four speakers from different parts of the country gave their view.
Bill Reeve, the director of rail for Transport Scotland and an engineer by background, had perhaps the easiest task as the results of Scottish rail investment are there for all to see. New lines, improved journey times, reduced emissions, better accessibility and affordability are all part of this. The electrification of the Shotts line is running ahead of time and within budget.
Scotland recognises that a steady workload to avoid peaks and troughs yields a secure industry employment base, which in turn leads to an alignment of customer and supplier. Developing new projects with Network Rail in CP6 is proving something of a challenge.
Whilst Scotland is only 11 per cent of the UK railway, it has 358 stations and 93.8 million passenger journeys each year, demonstrating how a devolved government can succeed.
Wales is different, as the Welsh Assembly does not have the same devolved powers as Scotland. Nonetheless, James Price from Transport for Wales stated that 100 per cent of the trains in Wales will be renewed by 2023, 50 per cent of them being assembled in the province. Coupled with 600 new jobs and £194 million of investment, this will yield 65 per cent more capacity.
Novel ideas will be free travel for under-11s, half fare for 12-18 year olds and free travel for up to 16 year olds off peak.
The big project will be the development of the Cardiff Metro operation, with a minimum of four services per hour on all routes, vertically integrated as much as possible and with better-value electrification. Improvements to information systems and closures of level crossings will be progressed.
Maria Machancoses, a director on the Midlands Connect body, explained the vision for much improved integration between east and west, from Hereford through to Nottingham. Foreseen is a £575 million boost in annual investment to achieve six million more passengers per year and many more freight paths. Connectivity with HS2 will be vital, but it needs to be influenced and integrated.
The North is perhaps the most vociferous of the regions with Barry White, the chief executive of Transport for the North, wanting increasing devolution. Current expansion is mainly rolling stock-based plus the Leeds-Manchester upgrade. More is needed, but this will need simplified procurement rules and an avoidance of projects going wrong so as to build a track record for future work.
All agree that funding for CP6 will be different, with Network Rail no longer pulling down debt. Scottish-style devolution would be welcomed, although it is recognised that Metro operation in the North and Midlands has already achieved this. Neither of these regions has seen major improvement to inter-city routes, maybe because the Network Rail situation restricts the freedom to act.
Crossrail and HS2
A discussion session with Sir Terry Morgan, chairman of both Crossrail and HS2, revealed his frustration and annoyance with the Crossrail delay, but lessons must be learned so a similar situation does not emerge with HS2. The importance of a fully functional executive board and a constant peer review group are vital, but three main points emerge: the management team must be capable of delivering the project; getting the appropriate funding and the need to get value for money is vital; and the business case must be continuously reviewed to ensure it is still appropriate. The late announcement of the Crossrail delay is an embarrassment and may have been caused by a ‘can do’ culture being lacking, something which needs putting right.
For HS2, stage 2b (the lines from Crewe to Leeds and Manchester) still needs a selling job, with the business case being based on opening up the midland and northern economies. The harsh reality is that, without stage 2b, the business case for stage 1 to Birmingham is negated, so business support is crucial and must be improved.
Key to successful delivery is building up the skills base, a subject that Sir Terry is passionate about. The apprentice levy scheme has not worked and people within companies have to find the solutions. Crossrail planned to take on 400 apprentices and actually ended up creating over 1,000 new apprenticeships, but HS2 is barely off the starting blocks. Making the job more attractive to young people has to gather importance, with no more talk of just employing bricklayers and electricians. Using the ‘greybeards’ to capture their experiences was a message to the audience.
The National Infrastructure Commission
So where does the NIC fit in with the needs of the rail industry? Sir John Armitt, who is its chair and a former chief executive of Network Rail, explained its purpose of looking for a strategic 25-30 year view of the country’s need with a check every five years to ensure continued relevance. A report is produced every six months and some projects are already prioritised, these being Crossrail 2, connectivity of Northern Cities, data for use in smart infrastructure, smart energy and the Oxford-Cambridge corridor. The latter involves rail, road and housing along the route, but there is little evidence of any co-ordination.
Some targets are already set: fibre to every household by 2023, devolution to cities of £43 billion over five years and a transport focus on electric vehicles with charging points to support this.
Road pricing remains controversial, but electric cars may be the trigger for this as the government’s income from road duty declines. The aim is to track every vehicle every day and a public debate will be needed on how to pay for road usage in the future. The intent to devolve expenditure to cities is flawed, as they do not have the resources to deliver.
The NIC is supportive of rail, in particular Crossrail 2 and HS2, with rail getting a dominant percentage of funding – £13 billion compared to the strategic road network’s £4 billion, despite rail representing only seven per cent of all journeys made.
A reiteration that HS2 is only worth doing if phase 2b proceeds gave comfort to many. The combination of a nationalised infrastructure and private train companies will never be easy to manage, with some form of vertical integration being needed. There is concern that the cost of high-speed rail in the UK compares badly with Europe. It seems the UK always has to ‘gold plate’ such projects, an example of always needing a new depot whereas France tries to use existing ones. Sir John was mindful of the old adage for an engineer – someone who can do for £1 what it costs others £5 to do.
Strangely, Sir John didn’t mention the UK’s appetite to have its high-speed network running in tunnels rather than above ground – something that adds to the cost but does appease Chiltern MPs.
A view from Network Rail
At the final count, it is Network Rail that will determine the need and programme for infrastructure spending over the next few years and Andrew Haines, its new chief executive, shared his first thoughts on priorities and future direction.
He recently spent a night out with a track gang in Leeds, which demonstrated to him the dedication and commitment of the workforce at the sharp end. Visiting, and listening intently to, all players in the industry – staff, suppliers, stakeholders, politicians – will be an important exercise in understanding how the industry operates and some of its shortcomings, and Andrew Haines has set himself 100 days to understand the railway’s current situation. Learning from the TOCs will be part of that, noting that South Eastern Trains is now one of the best performers, having a good management team that yields a stable situation delivering 97 per cent performance.
Network Rail is much more than an engineering capability provider, it is a service provision company. It is poor at project delivery, with an uncertain organisational structure. Evidence from the past indicates that the centralist approach favoured by former chief executive Iain Coucher (deputy chief executive of Network Rail 2002-2007 under Sir John Armitt and chief executive 2007-2010) yielded the best results. Since then, other models of organisation have been tried with no conclusive results, maybe reminding people of the long-ago statement from Sir Peter Parker that “the railway falls flat on its interfaces”. Rail alliances do help, the Scottish one being a good example, but it can be a hard learning curve.
The digital railway does not yet have a consensual understanding as to how it can be achieved, but traffic management systems should be seen as all-important. The Williams Review must not be used as an excuse to do nothing while its conclusions are awaited, and Brexit must not mean a free for all on new standards. The UK is linked to Europe by the Channel Tunnel and the supply industry is geared to provide products and systems that meet EU standards – to deviate from this would be extremely risky.
It is obvious that Network Rail is going to have to change, primarily to reduce its costs, but it is too early to say how this will be achieved. Perhaps Andrew Haines will have more idea after his 100-day review?
The Rail Supply Industry View
A discussion panel of Rosco, freight, operations, installation & maintenance and manufacturing interests considered the ‘Future of Rail’. The view was that rail growth will continue, but the industry must be mindful of the expansion of on-line business activity. Panel members stated that the travel experience of rail passengers still needs improving and should be transformed in the digital age, but the digital railway must be much more than just ETCS provision. Freight operations are also buoyant, despite the loss of coal traffic, but the threat of competition from driverless cars and trucks must not be underestimated.
The delivery of 7,000 new carriages in the last five years has been remarkable, as it took 21 years to achieve this previously. The knock-on is that around 1,500 vehicles will become redundant in the short term, all of which have useful life left in them, and it is a myth to think that customers necessarily want new trains to improve service.
The various members of the panel came up with a list of items for conference delegates to consider:
- Co-ordination of track and train interests – a move to vertical integration;
- The need for a guiding mind in the overall industry;
- Poor passenger performance and lack of fare integration is not down to the industry structure;
- Access to the industry by SMEs must be improved;
- A low carbon railway must be pursued more vigorously.
On the vexed question of possessions and blockades, the present situation is untenable and much improved planning and co-ordination is necessary. Also, real doubt exists as to whether ETCS can deliver the required capacity benefits.
Skills and diversity
There is a deficit of people wishing to join the infrastructure and transport industries, so said a panel made up of representatives of Young Rail Professionals, Women in Rail, DfT and HS2. They stated that rail is around 15 years behind industries such as media, finance and IT, and companies need to change their recruitment models and remove unconscious bias, often apparent by judging initial CV applications. Whilst graduate recruitment has its place, the attractiveness of engineering and diversity remains a problem.
Broadening the age range in schools to focus on non-graduate careers and create multiple routes into the industry – apprentice, student, graduate – would be a step forward. Universities should introduce non-graduate courses (Southampton is already doing this) and studying how the armed forces operate would be useful. Having quotas can be a double-edged sword – they distort reality as well as being illegal – but targets are acceptable. Overcoming the cultural legacy that rail is a male dominated industry is, however, the biggest challenge.
All in all, the Railway Industry Association organised a fascinating day with strong pointers emerging for all to note. Vertical integration, the removal of boom and bust, remembering the end customer and building the appropriate skill base were the main messages, and the supply industry can influence all of these.
The outcome of Brexit is a worry, and the government needs to ensure UK rail has a secure future in an international world.
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