Progress for Network Rail as it faces big challenges ahead

Network Rail has made progress over the past year including successfully delivering a number of major rail projects, however some performance setbacks mean that the company has big challenges ahead, says a report published by the Office of Rail Regulation (ORR) today.

The regulator’s Network Rail monitor and annual assessment 2010-11 provides an overview of Network Rail’s performance over the past year. Progress includes the successful delivery of project milestones including the completion of the Airdrie-Bathgate line and important progress on King’s Cross and Reading stations. The company has also developed improved plans for managing its assets, which the regulator now needs to see being effectively delivered.

ORR’s expectation, reflected in its settlement with Network Rail for the current funding period which runs from 2009-2014 (CP4), is that the company will become more efficient, improve its operational performance, and develop the rail network year-on-year. Network Rail needs to pick up momentum if it is to meet key targets for the rest of CP4, as the report also highlights performance setbacks and failures over the past year. These include:

• Safety – weaknesses in Network Rail’s safety culture have been recognised including the exposure of flawed injury reporting. ORR is often frustrated by the slow pace of necessary safety improvements, and a number of enforcement notices followed failure to make timely progress.
• Operational performance – Network Rail missed many of its targets for the year including for delays and punctuality. ORR has determined that exceptionally severe winter conditions were a major factor, and the company has admitted that despite its efforts it could have performed better. In addition, a recent upward trend in delays is concerning and the regulator has required Network Rail to submit plans for improvement, including how it will better cope with winter weather conditions in the future. Network Rail also breached its licence for poor implementation of its new integrated train planning system for which the regulator imposed a financial penalty as a strong incentive to consider better the interests of customers.
• Efficiency – Network Rail’s efficiency is analysed across its maintenance, operating and renewals costs. While it is ahead of plan for delivering maintenance and operating cost efficiencies, the regulator cannot confirm the overall position yet as there are still questions about its assessment of renewals efficiency which need to be answered.

ORR’s chief executive Bill Emery said:

“Network Rail made good progress in some important areas last year – delivering improvements to many railway stations and lines across the country. However, we have also seen performance setbacks and failures which mean that Network Rail faces big challenges if it is to meet the increasingly demanding targets it is funded to achieve.

“Network Rail missed the majority of its operational performance objectives for areas like punctuality, and it quickly needs to take steps to improve its safety culture. We want to see Network Rail learn quickly from its problems and to focus on improving performance that matters most to passengers.

“With targets getting increasingly tough year-on-year, ORR is pressing Network Rail not to fall off the pace of all its regulatory commitments – and to act now.”