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There is a satisfying synchronicity in the fact that the Department for Transport is due to publish the High Level Output Specification (HLOS) in June or July next year close to the tenth anniversary of the 1997 General Election which brought Labour to power. Will the HLOS see, we wonder, the Department for Transport atone for what, to the railway, has been Labour’s lost decade? Or is the industry doomed to a continuation of Transport Secretary Alistair Darling’s established policy of bodged solutions and dodged decisions?
At the start of the 2008 Periodic Review, Chris Bolt, Chairman of the Office of Rail Regulation warned that the HLOS must look beyond the nominal five year Control Period (CP) involved. Railway investment has a long time-cycle, now longer than every before. The result of a cut-back HLOS, imposed by an old-style Treasury-driven squeeze, could be a degraded capability perpetuated in subsequent Control Periods.
While ever wary of hostages to good fortune, it looks as thgough Chris Bolt’s warning seems has been taken on board in DfT Rail, judging by comments made by its Director Technical & Professional Clive Burrows at a conference in February organised by the Railway Division of the Institution of Mechanical Engineers. Before quoting Clive we should post the mandatory warning that Transport Secretary Alistair Darling has now become a serial rubbisher of his senior civil servants, at least whenever we report them as saying anything in public other than bland factoids. ‘I decide policy, not them’ is the gist of these put-downs.
But until Mr Burrows is slapped down, probably when this appears in print, we take encouragement from his view that ‘going forward we have to try and work out what our vision is for the rail industry and where we are trying to get to in 2030’. According to Clive, 2030 is the date when current growth levels will have doubled traffic levels.
As a result, DfT Rail is working on HLOS2 (2014-19) and even HLOS 3+ (2019 onwards, in parallel with the HLOS for the current Periodic Review, what Mr Burroughs calls HLOS 1. In a rational world this would mean that the implications of investment funding levels in CP4 on the ability of the railway to meet demand in CP5 and CP6 will not be dodged by default.
These positive developments are reinforced by reports that Mr Darling is to initiate a long term – say 30 years – strategy for the national railway. This would be a similar exercise to that already carried out for aviation, culminating in a Government White Paper. This, too, is encouraging, although our long experience cautions that for British governments ‘long term’ is up to the next election.
It also appears that the politicians are realising that cutting the extremities of the network will not produce the savings needed to make significant inroads into the current financial support for the railways. Speaking at the same conference, Mark Lambirth, Director Strategy & Finance at DfT Rail questioned the willingness of the taxpayer ‘to put in £3.5-£4.5 billion per annum as he does at the moment’, if cars became more energy efficient than rail.
At the risk of getting him slapped down by his Secretary of State too, we suspect that Mr Lambirth was subconsciously looking ahead to CP5. In reality, the total support needed by railway this year will be £5.6 billion, plus a further £1.24 billion for the Channel Tunnel Rail Link.
But it should fall to £4.8 billion in 2008-09, which supports our view that Mr Lambirth was looking forward to the likely range of funding in the SoFA. But even that level of expenditure is needed merely to keep the railway running to capacity. Labour’s Lost decade means that major investment, as opposed to expenditure, is now the only way to accommodate continuing growth.
This raises two questions – who decides what needs to be done and, when the die is cast, who pays? We believe that the key issue is not funding but the choice of enhancements and priorities. And here Network Rail could be the problem.
Since it took Railtrack out of Administration, Network Rail has been a vision-free zone. This is understandable, on the basis of the old saying, that when you are up tour, er, waist in alligators it can be hard to remember that the original aim was to drain the swamp.
So Network Rail declares itself to be all about OMR – operations, maintenance and renewal. Enhancements are for someone else at some other time. The West Coast Route Modernisation has left some deep scars at the Black Tower of Euston and new wounds continue to be inflected by the rump of that project.
But Network Rail must show the confidence to move on from OMR. As the operator of the network, who knows better where the capacity bottle necks and inadequate infrastructure are? And since enhancements are often mutually supportive in making the case for investment, they have to be seen in a network wide context.
There is also a warning from history. Should there be an outburst of spontaneous rational behaviour in Government and the HLOS, a strategic plan and new sources of funding, for example through road congestion charges, lead to a revival of true investment, the industry needs to be able to drop costed plans for the top 10 projects onto the Secretary of State’s desk before he is back from making the announcement in parliament.
British Rail, having had its fingers burned many times had become very good at this, and also very good at making projects happen quickly. Once a project is approved you have to make cancellation politically difficult
At present, there is virtually nothing for enactments in Network Rail’s long term business plan, which is not surprising given the current financial climate. But a roiling assumption of no investment in the current Control Period is no longer tenable. Sooner or later the railway will have to grow.
As a first step Network Rail should lay down a list of enhancement priorities, concentrating on the 20% of schemes that will produce 80% of the benefits and, probably, take 80% of the funding available. These projects should be ranked, at least initially, in order of operational priority, rather than cost.
We have some idea of what such a list will look like. We can see the start of a rolling programme of main line electrification – westward from Airport junction on the GWML, northward from Bedford on the MML. On congested lines, adding more track, Trent Valley style, is the only long term response to providing extra capacity. And in Informed Sources you can read what one freight operator would like to see.
We have been as guilty as any of focusing on the harsh realities of the hear and now during the lost decade for railway investment. The drive to cut costs and improve performance remains a priority, as it was for British Rail. But from now on the industry, which effectively means Network Rail, must alsp emulate the former state railway in actively promoting investment.
Alistair Darling likes to claim the credit for a growing railway and is upbeat about its prospects. Up to now he has had a free ride for this political advantage but now his pronouncements need to be greeted with a list of projects needed to keep the railway growing – and an invitation to sign on the dotted line so work can start at once.