Grayling – On the right track or off the rails?

Grayling – On the right track or off the rails?

Transport Secretary Chris Grayling’s plan to create a new rail delivery body is a very interesting development – and the results it achieves will be even more intriguing.

Grayling announced last week that he would establish a body called East West Rail to take forward the long-awaited Oxford to Cambridge project.

His cabinet colleague chancellor Philip Hammond pledged more than £100 million in last month’s Autumn Statement for the development of the rail line between the two famous university towns via Bedford and Bicester.

The overall project involves upgrading and rebuilding sections of track that are in various states at present. It is a major task and one ministers clearly believe needs fresh input.

Grayling said he wanted to bring “new skills” to the railway upgrade challenge, which does not necessarily say a great deal about the esteem with which Network Rail is held by the government.

Bringing in new faces to tackle the project is a laudable aim but one that may be difficult in practice, especially as Grayling wants East West Rail to “accelerate” the planning process for the route.

“I am going to establish East West Rail as a new and separate organisation, to accelerate the permissions needed to reopen the route, and to secure private sector involvement to design, build and operate the route as an integrated organisation,” he announced to Parliament.

Being judged on the speed by which the project gets underway means former Chiltern Rail MD Rob Brighouse will have a major challenge on his hands when he becomes Chair of East West Rail in the New Year.

Traditionally you would expect new organisations to take longer to get going on a project than existing bodies that are already set up to go. They will need to get key people on board quickly, if the Oxford to Cambridge scheme is to get moving.

How easy will it be to both move quickly and bring in new skills and top talent though?

If there is clarity on the new business’ responsibilities it could be an attractive company for progressive individuals. To some extent, people are likely to come from Network Rail itself as well as from key consultants working for the infrastructure operator, or client organisations in other infrastructure sectors. It could be attractive to those looking for something different to the norm.

Whether East West Rail can bring a team together to get the project moving swiftly and efficiently and earn a reputation as strong as the universities in the towns their project will link? If so then we could see the model repeated elsewhere. I’m sure the country will be watching with interest, I know I will be.

Elsewhere in Grayling’s statement to Parliament, the transport secretary said he would progress with greater vertical integration in the rail sector, last recommended in the McNulty report in 2011.

“In order for all those involved to be incentivised to deliver the best possible service for the passenger, I expect the new franchises – starting with South Eastern and East Midlands – to have integrated operating teams between train services and infrastructure,” said Grayling.

“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.”

Getting infrastructure and service operators to work more effectively together has long been an ambition of governments, but I’m doubtful if this model will realise that aim.

As long at the operating franchises are only given 10-year or shorter contracts, they won’t be incentivised to invest in the long-term state of the railways. And as Network Rail is a public body, it won’t have the profit of the operating firms as a priority.

You can send people on as many collaboration workshops as you like, but if you don’t address the fundamental differences in their organisations motivations, you won’t see true partnerships.

In my opinion, the only ways to get those who look after the infrastructure and those who run the trains on the same page are to align incentives by giving operators 20-year-plus franchises or to create wholly new bodies with full responsibility for both elements of the railway.

Implementing either of these measures would be bold. But it could ultimately lead to more effective investment in Britain’s railways.

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Author: Jim Newsom

Jim Newsom

Managing Director