Hendy rail review will spare no CP5 project

Secretary of State for Transport, Patrick McLoughlin, has issued terms of reference for the re-planning of Network Rail’s CP5 (control period 5) enhancement programme (which covers committed schemes for 2014-19). Sir Peter Hendy, Network Rail’s new chairman, will report back to the DfT by autumn. No scheme will be will be spared, and Hendy’s remit is to re-plan CP5 enhancements, “in a way that is efficient, deliverable and affordable.”

The DfT says the purpose behind the review is to ensure:

  • That the work planned is deliverable within the resources available to NR and its supply chain in any given financial year;
  • That maximum value is gained through finding the most efficient means of delivery;
  • That the cost for delivery within 2014-19 does not exceed the original funding assumptions for enhancements;
  • That work that cannot be afforded, or is not deliverable, between 2014 and 2019 is profiled for delivery beyond 2019, pending availability of funding; and,
  • That work is prioritised taking particular account of interfaces with other infrastructure programmes and the need to deliver the required passenger and freight benefits, franchise or rolling stock commitments.

The deteriorating performance of Network Rail is a major source of concern for the DfT: LTT reported (26 June) that Network Rail missed 30 out of 84 planned enhancement milestones in England & Wales, and that it was £234m over budget and had  underperformed its regulatory targets by £426m at the end of the first year under CP5.

LTT also reported (10 July) that Network Rail’s debt increased 14.5% last year and now stands at a record £37.8bn. The Midland main line and Trans Pennine electrifications were ‘paused’ in June, and contractors are now worried about the insecurity this is causing throughout the industry.

The Hendy review is not the only that is currently taking place:  Economist Dame Colette Bowe is to head a DfT review into how Network Rail plans and costs major investment plans and will report back in autumn. The DfT has also asked Nicola Shaw, Chief Executive of High Speed 1 Ltd, to advise the government on “how it should approach the longer term future shape and financing of Network Rail.”

Shaw is to produce a scoping (preliminary) study by autumn, as well as a more detailed report for spring 2016 (in time for the Chancellor’s Budget).

Hendy will work closely with Shaw and Bowe, and his work will also incorporate the findings of Network Rail’s own Brinded Sub-Committee (set up in January to monitor major project deliveries) and ORR’s investigations into NR enhancement delivery.

The Hendy Review, November 2015

681/Sep 15

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