Network Rail plans delivery upgrade following watchdog censure

16 Oct 15

Network Rail has agreed a plan to improve delivery of major infrastructure projects after a transport watchdog concluded it was in breach of its licence conditions due to cost increases in some schemes.

An examination by the Office of Rail and Road concluded that the changes, which also followed a pause in some rail electrification projects ordered by government, would tackle “systemic weaknesses”.

The regulator launched its inquiry following concerns about deliverability of the upgrade plan for 2014 to 2019, known as control period 5, after a significant number of milestones were missed.

It found the state-owned infrastructure firm had poor processes for setting initial project requirements in some cases, as well as no defined framework for managing complex programmes and low productivity. Together these issues resulted in significant underestimates of project timescales, and led to forecast cost increases.

As a result, Network Rail has worked with the ORR to devise a revised enhancement improvement plan. This is intended to lead to improvements in how the firm manages its relationships with those involved in projects and to improve how costs and risks are estimated

ORR chief executive Richard Price said it would now hold Network Rail to account on how these changes are delivered.

“Network Rail has been entrusted with billions of pounds to modernise Britain’s rail network,” he stated.

“Network Rail’s response to our investigation findings has been positive and collaborative. We welcome its enhancement improvement plan, which requires significant changes to the company’s processes, systems, culture and capability. ORR is now closely monitoring Network Rail’s implementation of the necessary improvements, as they are fundamental to ensuring delivery of enhancements on time and budget for passengers and customers.”

If the improvements are not implemented, then the ORR will retain the option to levy a financial penalty against Network Rail for a breach of its licence conditions.

However, it concluded this would not currently be appropriate as it would divert financial resources that could be used to deliver the plan.

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