Changes to the way Network Rail delivers infrastructure projects worth £2bn a year come into force today – part of a wider programme of reforms at the company which aim to encourage competition, drive down costs and deliver a better value for money railway for Britain.
A new, commercially focussed, regionally based projects delivery business – Network Rail Infrastructure Projects – has been created, with four regional directors and three programme directors responsible for delivery of major renewal and enhancement infrastructure in their area. They will manage their own profit and loss and will be charged with winning work under a new competitive structure proposed by Network Rail.
Simon Kirby, managing director, investment projects, said: “Network Rail is transforming the way it works as a company and taking the lead in driving change through the rail industry. Our commitment is to build not just a bigger and better railway, but a better value railway too.
“The investment Network Rail is delivering now and for the future is crucial to accommodating increasing demand and supporting economic growth. 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.”
A new ‘client’ function has also been created within Network Rail that will clearly define project outputs and work with delivery organisations much earlier in the project lifecycle. In most instances the delivery organisation will be Network Rail Infrastructure Projects; however some lower risk projects will be tendered to the market in order to benchmark the company’s capital project delivery. For better or worse, this will provide firm evidence of Network Rail’s capabilities in relation to its competitors.
To enable open competition for this work, Network Rail Infrastructure Projects will need to become a separate legal entity. This is planned for 2013, when it can start to bid against other market competitors for some of Network Rail’s capital programme for Control Period 5 (2014-19), as well as for other UK off-network projects.
Simon Kirby concluded: “The changes we’re making to our projects delivery business will encourage competition, innovation and closer partnerships with our suppliers to deliver projects more safely, competitively and efficiently.
“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.”