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It’s all down to good planning: an interview with Network Rail’s Francis Paonessa

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On the face of it, Network Rail didn’t have a bad Christmas in 2014. 11,000 people were deployed to work on 2,000 sites around the country, with 314 out of 322 projects handed back on time. That’s a 97.5 per cent success rate – better than the 95 per cent that was anticipated.

So only eight projects overran.

However, and it’s a big ‘however’, two of those eight were at King’s Cross and Paddington stations.

King’s Cross was closed for an extra day, and the contingency plan to use Finsbury Park went wrong for several reasons (see issue 142, February 2015), resulting in overcrowding, confusion and exasperated passengers.

Paddington, which should have been handed back at 07:00 on 2 January, wasn’t finished until 13:14 that day. The result? More overcrowding, confusion and exasperation.

Political fall-out

Questions were asked in Parliament and Network Rail chief executive Mark Carne demanded a full report be on his desk on Monday 12 January. Wednesday 14 January, Carne and colleague Robin Gisby, who had been the director on call over the holiday period, appeared in front of the Commons Select Committee.

Then, to cap it all, Infrastructure Projects managing director Dr Francis Paonessa, the author of Mark Carne’s report, and who had only been with Network Rail for a few months, had Rail Engineer come to his office to ask what happened – the first press organisation to do so.

As it turned out, Francis was both transparent and informative. He detailed all the reasons for the overruns, explained how they happened and what mistakes had been made, and pledged to improve things for next time.

“At the end of the day, the railway is here for passengers. It’s not here to be a railway,” Francis Paonessa affirmed. “It’s here to transport people around and we must put their needs and requirements first.”

“It shouldn’t matter to the passenger how we’re making sure that they’re not disrupted, whether it’s through guaranteed delivery plans or excellent service, all that matters is that the trains run on time. We need to do what we say we will do which is to deliver an effective railway and make sure that it is there when the passengers need it. That’s our mission, that’s the mission we set out to achieve. It’s one that Mark Carne has said quite clearly that we’re not doing well enough.”

“We need to do better and we will do better.”

Waterloo woes? Or careful contingency?

And they have got better, despite the programme of engineering works at each holiday period getting bigger. While some delays have occurred, overruns have largely been on minor works and can be measured in minutes rather than hours or days.

However, the recent August bank holiday demonstrated not only how complex these programmes are, but how easily they can still go wrong. Across the country, the engineering works were the largest ever undertaken over an August bank holiday, costing £130 million and involving 17,000 staff. It included the culmination of three and a half weeks of work at London Waterloo, Britain’s busiest station, where 1,000 engineers and track staff worked 24 hours a day to deliver one of the largest and most complex upgrades at the station in a century.

Unfortunately, the work at Waterloo overran by two hours owing to safety critical work to test the signalling taking slightly longer than planned in the final hours of the programme (explained elsewhere in this issue). In itself, a two-hour overrun after 180,000 manhours of work had been carried out doesn’t sound too serious, but it affected trains and passengers throughout the day. However, communications were better, keeping passengers informed, and there was nothing like the disruption that occurred two years earlier.

External benchmarking indicates that this perceived progress is not purely subjective. Aspire Europe recently completed an independent review of 400 project companies around the world and concluded Network Rail Infrastructure Projects is in the top 10 per cent of project delivery organisations globally and is the world leader in the global transport sector.

The review highlighted a “stark improvement in performance” today compared to the systems and processes used in 2014. The report noted that “the results have demonstrated an exceptional level of improvement for a large organisation” and that, in two measures, infrastructure projects has set the new international benchmark.

Works are also being delivered more safely, with workforce injuries reduced by nearly 40 per cent in the three years to 2017.

So what has changed? Rail Engineer retraced its steps to Dr Paonessa’s office, now relocated to Euston from King’s Cross, to ask him.

Setting the scene

To understand the legacy of some of the issues, it is necessary to go back to Christmas 2007. A blockade of the West Coast main line at Rugby had been planned as part of the route modernisation programme. It was originally planned that this should be handed back after 30 December 2007, though an extra day’s extension was requested.

As it happened, the possession overran further, until 4 January 2008. The subsequent ORR’s report concluded: “there is still work to do to put adequate plans in place to handle passengers and freight affected by the possessions and to develop contingency plans.”

Whilst this bears striking similarity to comments made after Christmas 2014, Network Rail had improved its procedures in the interim. A new Delivering Work Within Possessions procedure was put in place under which every project was assessed to make sure there was at least a 90 per cent chance that it would be delivered on time. Key blockades, which could badly affect the network, had to exceed 95 per cent.

Both King’s Cross and Paddington had exceeded that 95 per cent target for completion on schedule, but they still were not returned on time. And the effects were damaging for Network Rail’s reputation.

“I think we’d all agree that having a 90 per cent success rate of our major possessions would just be completely untenable at any bank holiday, and Christmas 2014 really underpinned that,” Dr Paonessa commented. “At the same time, costs are obviously really important, so we can’t guarantee hand-back 100 per cent by being super-conservative in our delivery or we could never afford to get anything done. It’s a fine and complex balancing act.”

Therefore, the task was to maximise the work done during a blockade, without building in too much cushion, while still handing back on time.

Contingency planning

A railway is all about its passengers, as Francis had affirmed back in January 2015. So that was where he started: “We looked particularly at the operational contingency plan, which is very much route-led with the train operators. If we’re going to end up in an overrun position, what are the series of mitigations that we can put in place for the passengers?”

The idea is to have a strong contingency plan, or plans, which can be brought forward if the project gets into trouble. For example, these might be to get the Fast lines back up and running, so buying the project a bit more time to finish off the Slow lines.

The operational plan is then built up from the contingency plan, putting the interests of the passengers first rather than those of the engineers. But the aim still has to be to get all the work done on time.

“If you only ask one question, which is ‘What’s the likelihood of getting the full scope back on time?’ you tend to be very conservative in the work scope,” Dr Paonessa explained.

“Instead, we ask ourselves two questions now. ‘What’s the likelihood of getting all the work handed back?’ and ‘If we can build in some pieces of work towards the end that we could curtail, then what’s the likelihood of being able to hand all the work back?’

“By taking that approach, we can accept a lower percentage for the ‘handing it all back’ versus the ‘guaranteeing being able to hand it back’ by just structuring the way we do the work. Typically, we lose about half a per cent of the planned work in mitigations which, considering the scale of the work that we deliver, is really good.”

It seems to be working. There have been no significant overruns (excepting the two hours at Waterloo) on any bank holiday for the last two and a half years.

One truth

There has also been improved communications. The project teams report to Route Control and thence senior management and key stakeholders. From there, the communications team disseminates what is happening – when, where and, crucially, why – to the press and the public. So there is consistency and the message is accurate and timely.

As well as keeping passengers informed, this single message is crucial if there are problems to solve.

“It has made a huge difference,” Francis stated. “We can, at a very early stage, get the route control managers involved in the process. Frequently, they can facilitate the involvement of their own staff and quite often will get several operational teams to come and support hand-back activities. We’re also then fully integrated – our Route Services and Supply Chain teams sit adjacent to each other in Milton Keynes, so any knock-ons to drivers, locos, tampers can all be arranged in a very timely and consistent way.”“Importantly, my project teams aren’t making decisions on the ground that aren’t supported by the external infrastructure and backed up by project contingency plans. We have also put in place mechanisms and people outside of the project to challenge, and hence counter, the natural optimism bias that you have when you are working hard on the job.”

So now, if the project team is tempted to say: “Yes, we’re a bit behind but we’ll catch up,” there’s an external person who can ask why they think that, what plans do they have to make it happen, and what happens if the team gets to a point of no return? Project teams are no longer able to pass a key halt point, as they did at King’s Cross and Finsbury Park, without the approval of a third party.

Due to the amount of work going on, one of the big problems at Christmas and other key holiday periods is the scarcity of resources. That doesn’t just include machinery and the workers on track, it also includes the drivers of the engineering trains that keep the sites supplied.

Now, spare drivers are employed, a small price to pay compared with the cost and reputational damage caused by a major overrun.

“If you can’t move the tampers at the end of the day, if you can’t move the locos, if you start running out of drivers for resource vehicles on a work site which is totally dependent on them, you’re suddenly in big trouble,” Dr Paonessa stressed. “Now we’ve got an agreement with the freight companies that any of the drivers can drive any of the locos, so if we need to shuffle them round site, we can do that.”

Resources and access

A perennial discussion point is whether Christmas, and the other bank holidays, is the best time to do major work, or whether it would be better done throughout the year. Resources would be more available and, perhaps, the weather would be better.

“We’d like to have longer periods where things are closed down to give us full access to the railway, but we also know that the passenger disruption that this causes is really significant,” was Francis Paonessa’s response. “So we entered into CP5 with an assumption, as part of our business plan, that we would get 25 per cent more access than we did in CP4. As it turns out, I think in Year 1 we ended up with 16 per cent less.”


“Less. In year two -14 per cent less. This year I think we have 11 per cent less access than we had in CP4. And, more importantly, we’ve seen a 40 per cent reduction in 24-hour plus possessions and a 50 per cent increase in the number of less than eight-hour possessions. A great proportion of the access we have is now made up of very short periods of time – in fact our average possession that’s less than eight hours is only 5 hours and 30 minutes. So, not only has the quantity of the access changed, but the mix of it has changed significantly.”

This is an unfortunate by-product of having such a successful railway. Late trains are popular, early trains are popular, so operators are unwilling to give them up to facilitate engineering works, squeezing the time that Network Rail can get on track. Bank holidays, when on average 40 per cent fewer people travel by train, are still the obvious solution.

“There are some jobs that can only be done in three or four day blocks,” Francis added, “and they can only therefore be done at Christmas and the major bank holidays. Getting a three-day block of the West Coast at any other time of the year would be impossible.”

“However, it’s worth remembering that, on average, we’re delivering £130 million of major renewals and enhancements every week. So, whilst the bank holidays and other points in time where we tend to have the longer blocks represent a very visible peak, they are still a relatively small proportion of our total delivery in the year.”

Major projects

While Network Rail seems to have largely fixed its problems with Bank Holiday overruns, there are still other areas to improve. For example, Great Western Electrification and Sheffield Tram-Train are both running late and over budget. In contrast, projects such as the Ordsall chord in Manchester and Norton Bridge in Staffordshire are successfully being managed through alliance partnerships.

Does this mean that alliances are the way forward? Statistics show that, when Network Rail is working in alliance with its contractors, costs are being held to within 1.3 per cent of budget, but Dr Paonessa warned against jumping to conclusions.

“When you look at that, you’d say: ‘Having an alliance is a really good way of managing cost control,’ and it is, but I think it’s the wrong conclusion. Because, if you look at what is needed to be able to set up an alliance, you have to have a very clearly defined scope, you need to have worked out the options and have the opportunity to really cost it. Only then can you set up an alliance because, at that point, commercial partners will be prepared to take those commercial risks.

“So what that really says is that projects that work well are ones where we spend about twice as long in development as we do in delivery. Where we’ve seen the large cost increases tends to be when commitments in time and cost are made against very early estimates. It was one of the key things that came out of the National Audit Office report on Great Western, and very similarly on Sheffield tram-train. So, I’d say that our delivery capability is excellent when the scope and access are properly pinned down.”

That’s borne out by a study the Department for Transport undertook with University College London (UCL) last year to look at optimism bias in early GRIP (Governance for Railway Investment Projects – an eight-stage process) phases. It concluded that cost estimates made at the GRIP 1 stage (output definition) tended to be 66 per cent optimistic, 40 per cent at GRIP 2 (feasibility) and 17 per cent at GRIP 3 (option selection).

With a five-year Control Period cycle, plus two years in its preparation, some projects are being costed up to seven years before they are built, when they are still in the early GRIP stages and optimism is rife.

Post GRIP 4 (single option development), when the options are much clearer, Network Rail is working within three per cent of budget. So, it seems that the problem lies with being forced to estimate costs at an early stage of a project, which is just what happens under the current control period funding. At the start of CP5, 80 per cent of the projects hadn’t been finalised, yet they were all costed.

“It is very challenging to manage within a finite cap when you’ve got inherent levels of uncertainty built into the work that you’re doing,” Francis Paonessa commented. “You only need to reflect back on the UCL work to say that those uncertainties are very, very real.

“I think that the key point, and the bit we’ve been working with the Department to get built into the process, is what we call a ‘final investment decision’. This means that we don’t commit financially, and to delivery times, against projects until we actually know what they are and what they’re going to cost. That’s a discipline which we’d really like to see built into the next control period.

“How that gets funded is a different question, but it would certainly be recommended in our Enhancement and Improvement Programme that there is a final investment decision when we get to the end of somewhere around GRIP 3 or 4, depending on what’s appropriate for the project. Then we’ll say, ‘Right, we’ve now got a very high level of certainty, we’re about to move into a delivery phase so we’ve got much greater certainty of access as well, we know it’s going to cost this, it’s going to take this long, do you still want to buy it?”

In the recent High-Level Output Specification (HLOS) for England and Wales, the DfT has indeed noted that “the Statement does not commit to infrastructure enhancements. These are expected to be dealt with separately.” It therefore looks as though major projects won’t, in future, be part of the control period system but will be costed and timetabled individually, at the appropriate time and when all the facts are known.

Hansford Review

Last month’s Rail Engineer (issue 155, September 2017) outlined the main conclusions of the Hansford Review and included comments from its author, Professor Peter Hansford.

Although the review focussed heavily on investment, it also set out the benefits of private-sector competition for Network Rail.

In addition, the report made some practical suggestions for Network Rail to consider. These included creating a new service level agreement that establishes the terms of business between Network Rail and third parties. It also said that there should be a single point of contact within Network Rail to simplify the process.

Asked about his view of the possibility of third party investment and delivery – and, in the latter case, the competition this could bring to his organisation – Francis responded positively: “In some respects it’s difficult not having anyone to compete with as we have no benchmark to measure ourselves against and be compared with. The analogy I’ve typically used is of Usain Bolt running the 100 metres – how do we know how fast he is running without having a competitor to reference his performance?”


However a project is delivered, to budget or not, on time or late, everyone acknowledges that it has to be delivered safely. Francis was cautiously upbeat about this.

“The year before last, we managed a reduction of 26 per cent in our lost time injury frequency rate, last year another 16 per cent and this year we’re already on track to hit our target of 10 per cent.

“I personally find it very difficult to set a target that isn’t zero, in relation to injuring people. But, at the same time, you have to recognise where you are and where you’re moving to and to set challenging but realistic targets. And if you think that only five per cent or so of the labour that’s in those hours is directly controlled by Network Rail – the other 95 per cent is in our contracting community – I think you really have to recognise the large efforts that have been made by our supply chain to deliver these figures.”

“The biggest single influence on safety is planning, and we can see a very, very clear correlation in the data between safety and performance. So, at those times when we do our best planning, which tend to be the bank holidays, we’ve seen the lowest lost-time injury frequency rate, which typically can be a third to a half less than our moving annual average.”

So, as well as Christmas work now being better controlled in terms of time, budget and contingency, it’s also safer. And that’s a Christmas present we’d all want.

This article was written by Nigel Wordsworth. 



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