Network Rail starts new infrastructure drive

Network Rail has launched its new project delivery business which aims to drive down costs as part of a wider package of reform in the wake of Sir Roy McNulty’s report on boosting efficiency in the sector.

The organisation said Network Rail Infrastructure Projects had been designed with the aim of encouraging competition into its operations, and that the new delivery business was expected to become a separate legal entity next year.

Sir Roy’s report suggested that further efficiencies of up to 20% were possible in Network Rail’s capital investment programme, which currently has infrastructure projects worth £2bn a year.

Under the new model, Network Rail Infrastructure Projects will have four regional directors and three programme directors responsible for delivering projects in their area.

Network Rail said they would manage their own profit and loss and be charged with winning work under a new competitive structure.

When the infrastructure arm has attained its separate legal status it can start to bid against other market competitors for some of Network Rail’s 2014-19 capital programme, as well as for other UK off-network projects.

Managing director for investment projects Simon Kirby said the new structure was intended to transform the way Network Rail operated as a company and drive change across the whole industry that would result in better value.

“The investment Network Rail is delivering now and for the future is crucial to accommodating increasing demand and supporting economic growth,” he said.

“But it is clear that capital investment in infrastructure must be delivered as efficiently as possible, with the best possible value secured for every pound spent.”

Network Rail said it had created a new “client” function within the organisation that would “define project outputs and work with delivery organisations much earlier in the project lifecycle”.

It said that in “most instances” the delivery organisation for work would be Network Rail Infrastructure Projects, but that some “lower risk projects” would be tendered to the market in order to benchmark the company’s capital project delivery, providing firm evidence of Network Rail’s capabilities in relation to its competitors.

Kirby added: “Our focus over the next few years will be on improving and becoming more efficient at delivering projects in a commercial environment.

“Our aim is for Network Rail Infrastructure Projects to build an unrivalled record of successful project completion, innovation and reduced cost to rail users and taxpayers whilst delivering better value for money. In the longer term, the goal is to be the leader in providing rail infrastructure solutions in Britain.”

The regional directors are responsible for delivery of major renewal and enhancement projects and programmes - excluding track renewals - in their area, and for winning new work under the competitive structure proposed by Network Rail.

Major programmes that span multiple regions, such as Thameslink and signalling will continue to be delivered as separate programmes.