DDRF hears of ‘massive’ opportunities for suppliers

Sir Roy McNulty told delegates at the DDRF annual conference that the way the railways are now run is “absolutely not common sense” as rail workers and unions protested outside the meeting against his recommendations, which they say will mean job cuts and a worse service for passengers.

They also continue to demand the Government re-opens the Thameslink rolling stock contract.

The Derby & Derbyshire Rail Forum met at the Derby Conference Centre yesterday to discuss ‘The Challenge of Today’s Railway’, with speeches by Network Rail chief executive David Higgins, Crossrail chairman Terry Morgan, and Sir Roy.

The annual conference suffered an early setback when the fourth planned speaker, transport minister Theresa Villiers MP, pulled out with little notice to attend to a constituency planning matter. Tim Horne, the new managing director of East Midlands Trains, stepped in to speak in her place, addressing the conference on the best ways of convincing passengers that cheap tickets really do exist.

Villiers apologised, but regional officer for the Unite union, Mark Young, told the Mirror newspaper that she was guilty of “political cowardice”, adding: “The fact she thinks a local planning row is more important than the loss of 1,400 jobs and the future of train building in Britain beggars belief.”

Sir David outlined the huge cost pressures on Network Rail to make savings, and the company’s plans for doing so, focusing on organisational structure and the new devolved routes, better supplier relationships, improved asset management, and more ‘alliancing’ with TOCs – which will be easier once the new longer-term franchises start getting awarded.

He made it clear that increasing capacity to cope with passenger growth, while having shorter and shorter possession windows in which to do so, would be a major challenge.

He admitted that there were “natural problems” that arise from the fragmentation of the industry and the misaligned incentives for all the major players. However, he said there were also great opportunities for the supply chain over the next 20-30 years, as Britain’s major spending is in the future – not behind us, as is the case in many European countries.

He explained: “The good thing is we have an old railway that needs massive investment; that’s better than France and Spain – they’ve spent their money. We need to say to big investors and big manufacturers that there’s a 20-year strategy here, and ask what they’re going to invest in, in terms of skills and expertise and research, and how they are going to help this industry go overseas. That’s a great carrot we have: the amount of turnover that’s going to be spent in this country on rebuilding the railways over the next 20 or 30 years.”

He said overhauling passenger information systems would be another big task, as they are “back in the Dark Ages” at the moment.

Morgan gave an upbeat assessment of Crossrail’s progress, explaining the huge engineering challenges arising from the tunnelling especially, but also the benefits and jobs it will all create.

He also explained how Crossrail has benefited doubly from competitive tendering, as it has not only allowed it to get the best value-for-money contracts, but has also thrown up lots of ideas at the bid stage – with some of them incorporated into the design even if the idea came from an unsuccessful bidder, who then gets to share in the savings made.

He said: “With their agreement, we share some of the good ideas that they’ve given us.”

The cost reductions this process enabled were underestimated, he said: “In order to encourage the conversation, we had a 50/50 split. We actually saved 5% on a £1.2bn contract. That’s a win-win.”

Sir Roy discussed his value-for-money report, said how pleased he was with the steps taken so far, and during a Q&A session said he would have an “open mind” on a reduction in the number of route franchises, although he didn’t necessarily think it was an answer.