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East West Rail heads move to vertical reintegration

06 Dec 2016

UK: On December 6 Transport Secretary Chris Grayling announced a series of measures that aim to provide ‘a better service for the passenger’ through closer working between train operators and infrastructure manager Network Rail.

‘We want to see closer working across the industry to resolve problems more quickly’, said Grayling. Announcing his intention to ‘start bringing back together’ train operations and infrastructure management, he said ‘our railway is much better run by one joined-up team of people. They don’t have to work for the same company. They do have to work in the same team.’

‘In order for all those involved to be incentivised to deliver the best possible service for the passenger’, Grayling expects that the replacement franchises to be awarded by the Department for Transport will have ‘integrated operating teams between train services infrastructure’. This will start with the Southeastern and East Midlands franchises to be awarded in 2018. Grayling is to invite Transport for London to be more closely involved in developing the next Southeastern franchise by seconding a representative to the franchise specification team.

‘We will continue to develop the model for greater alignment of track and train as further franchises are renewed — including the option of joint ventures’, said the Transport Secretary in his written statement to Parliament. Franchise renewal is to be conducted to the revised schedule published by DfT on December 6.

Grayling also announced that he is to establish the East West Rail project working to provide a direct rail route between Oxford and Cambridge ‘as a new and separate organisation’,  in order to accelerate the process of obtaining legal powers to reopen the route. The new structure would also ‘secure private-sector involvement to design, build and operate the route as an integrated organisation’.

‘The first new integrated rail operation in decades that is separate to Network Rail’, according to DfT, this special-purpose vehicle is to be established early in 2017. It will be chaired by former Chiltern Railways Managing Director Rob Brighouse.

East West Rail would provide ‘the transport spine for additional housing and business development in a corridor which is one of the government’s priority areas’, said Grayling. ‘The new organisation will work hand in glove with the National Infrastructure Commission as it plans the development of this nationally-important transport corridor to identify the best way to deliver the project.’

Responding to the announcement, Network Rail Chief Executive Mark Carne said the infrastructure manager strongly welcomed plans to introduce ‘more joined-up working’ within the industry. ‘We have already devolved Network Rail into Route-based businesses closer to customers’, he said, noting that the proposals would build on the alliances that Network Rail’s routes have formed with passenger operators.

On East West Rail, Carne said: ‘competition must be at the heart of any organisation that wants to behave like a private-sector business. Competition breeds efficiency and innovation and will further encourage our own teams to push aside the barriers holding them back.’ Network Rail had commissioned an independent review ‘into the barriers to competition in all elements of delivering rail engineering projects’, as Carne wants to encourage ‘contestability’ in all elements of project delivery to encourage third-party funding as well as ‘innovation and new models of delivery’.

‘Passengers deserve a railway focused on their needs, to create economic growth, for job creation and housebuilding, and that's what we're working hard at’, he said.