1 / 20

Network Rail’s Strategic Agenda

Network Rail’s Strategic Agenda. Calvin Lloyd. Plans for the railway. Industry structure. Value for money. The nature of our company. Key strategic issues. £26.7bn. LICENCE BREACH. COMPLETE WORK ON-TIME. PPM 92.6%. Network Rail’s business environment. Government view of rail?.

sylvester-potts
Download Presentation

Network Rail’s Strategic Agenda

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Network Rail’s Strategic Agenda Calvin Lloyd Create your footer by changing copy in the Header and Footer section

  2. Plans for the railway Industry structure Value for money The nature of our company Key strategic issues

  3. £26.7bn LICENCE BREACH COMPLETE WORK ON-TIME PPM 92.6% Network Rail’s business environment

  4. Government view of rail?

  5. The nature of our company Create your footer by changing copy in the Header and Footer section

  6. Key features of a CLG

  7. Value for money Create your footer by changing copy in the Header and Footer section

  8. Key costs & revenue drivers… Costs Income Using CP5 totals (2011/12 prices). The Network Rail costs are based on an illustrative CP5 forecast

  9. International benchmarks £ / passenger km Comparator railways (F, NL, SE, CH) • Infrastructure & rolling stock contribute most to higher costs. • Train operating costs are below comparisons. • 40% reduction needed to reach benchmark average. • Additional 10% from efficiency models is due to relatively lower levels train utilisation. 9

  10. Key findings of VFM study • 30% reduction from 2008-09 industry costs should be possible by 2018/19, with further savings beyond that. • The industry needs to plan how to meet this challenge and take responsibility for change. • There are 10 broad areas identified as causing inefficiencies. • Recommendations cover 8 areas and effect a wide range of the industry, from government policy and regulation through to operators and Network Rail’s activities and relationships.

  11. Savings to be achieved • Estimate for savings in year 2018/19 (09/10 prices) over and above CP4 and initial CP5 targets (£m). • The remaining £600m could be delivered by a 5% improvement in train productivity.

  12. Recommendations – key themes (1) • Industry objectives, strategy and outputs. • Franchising reform is supported by the Study. • Leadership, planning and decision making • Structures, interfaces and incentives • Improve incentives on Network Rail and TOCs • Fares & other revenue • Asset management • Whole system programme management • Supply chain management • Safety, Standards and Innovation

  13. Progress to date • The Study recognises the efforts of Network Rail and train operators to address the “co-operation deficit”. • Network Rail’s commitment to change, to a focus on customer needs, and to greater levels of safety, transparency and accountability is noted. • Train operators’ greater willingness to work with Network Rail is also noted. • Early signs are described as “encouraging”. • The Study also welcomes the plans announced by Network Rail to improve engagement with suppliers and contractors.

  14. Implementing change • The Study recommends “a large amount of change” that should be evolutionary rather than revolutionary. • Focus is on making existing structures work better. • Legislating change would use valuable time and effort, and be disruptive and potentially costly. • Major changes and the identified efficiencies can still be delivered by adapting existing structures. • Many of the changes within Network Rail have already begun.

  15. Plans for the railway Create your footer by changing copy in the Header and Footer section

  16. PR13 Key milestones • Sep 2011: Initial Industry Plan • February 2012: ORR advice to ministers • July 2012: HLOSs and SOFAs • January 2013: Strategic Business Plan • June 2013: Draft Determinations • Sep 2013: Response to Draft Determinations • October 2013: Final Determinations • February 2014: Accept / reject decision • March 2014: CP5 Delivery Plan

  17. The Initial Industry Plan • Planning Oversight Group asked by ORR to publish an Initial Industry Plan (IIP) in September 2011. • In terms of expenditure, the primary focus of the IIP is the level of overall Government subsidy to rail in CP5 • We have been asked to prepare at least two scenarios: • The cost of the current railway • A preferred plan that meets customer and stakeholder needs • This will inform the development of the High Level Output Specifications (HLOSs) and Statement of Funds Available (SoFAs) to be published by DfT and Transport Scotland in July 2012

  18. “Background” growth – summary

  19. Key questions • Is the scale of ambition right? • What additional outputs do we want to deliver? • What assumptions do we make about industry efficiencies in CP5? • How will devolution impact on our costs? • What policy choices should we examine?

  20. A compelling future for Network Rail “A leading independent British-based infrastructure group that is internationally recognised for providing rail transportation solutions that deliver outstanding value to customers”

More Related