Return to Archive -by date - by topic - 1999
In the privatised railway performance is measured in outputs. You sign a contract saying you will do something for a price. If you deliver that something on time and to specification you get paid. Should you exceed expectations you may earn bonuses. Should performance, delivery or quality fall short, penalties will certainly be extracted.
So far so good. But, as Sir Alastair Morton has pointed out, railways are a supertanker type businesses. When you give the instruction ‘hard a port' it takes a long time before the ship starts turning. Which is why we honour those railway managers and engineers who can make the supertanker turn more smartly.
But there are limits. Chris Green famously launched Network SouthEast in a flurry of red lamp posts just six months after taking over. But it was six years before the first networker trains were handed over. Similarly, it was took five years between the authorisation of the East Coast main line electrification and the first electrically hauled InterCity services.
What this tells us is that railway contracts can have a long gestation period between signing the contract and getting the output. Or not as the case may be.
It is also the case that the further away the delivery of the output, the bigger the potential for a nasty surprise on the due day.
Which brings us yet again to the West Coast Main Line Modernisation. As more management parachutes bloom behind Railtrack's jumbo project, and a new crew takes over on the flight deck built around Acting Commercial Director Robin Gisby's freight team, it is clear that in aerodynamics terms the WCML modernisation is on the back of the drag curve.
If the pilot pulls back on the stick anymore it will only succeed in generating more drag, slowing the plane and reducing lift. If the project is not to fall out of the sky the only course of action is to put the nose down, apply maximum emergency thrust and get back up to flying speed.
And this is what we may have seen in the project plan delivered to Virgin on 28 May. Because in project delivery, it is spending money that provided the thrust that drives the programme. Start early spend slowly, start late and spend fast. And it is now very late on the WCML and time to push the financial throttles through the gate.
Of course we may be panicking unnecessarily. Perhaps the hand of Railtrack Finance Director Norman Broadhurst has been pushed away from the throttles and the WCML Route Modernisation is getting back up to flying speed. But Virgin West Coast won't know for sure until the outputs fall due with the Summer timetable in 2002.
Not much fun, then, if your name happens to be Richard Branson or Brian Souter and you own half of Vigin West Coast. How can you tell whether Railtrack is going to deliver the outputs promised? Who can you turn to?
Why, the Rail Regulator, of course. Tom Winsor needs to get stuck into long term delivery – and fast. We see the conversation going like this.
The Regulator threatens Railtrack with instant and massive retribution because it looks as if it will fail to meet Virgins reasonable requirements on the WCML come 2002.
‘It will be all right on the night', protests Railtrack. ‘Prove it', snarls the regulator. ‘Give me your complete Level 3 project plan with possessions, signalling stages, track renewal milestones, the whole nine yards. You do have it to hand don't you?'
‘Er yes' says Railtrack.
‘Good' smiles the regulator, ‘Send it round to my office by the end of the week. And of course, since everything is going swimmingly I'm sure you'll indulge me by accepting some suitable fines for missed milestones. What would be suitable? Let's see Total cost of Phase 1 one billion, about a thousand days to go - how does £1million a day sound. (Sir Alastair Morton behind the arras 'sounds like peanuts, make it five')