Network Rail may have breached licence says ORR

The Office of Rail and Road has written to Network Rail saying that late delivery of some enhancement programmes could be breaching condition 1 of its network licence.

The letter, dated 6 August, was written by Alan Price, ORR director of railway planning & performance and was addressed to Network Rail’s Paul Plummer, group strategy director.

ORR first raised concerns about the steady slippage of Network Rail’s investment programme in July 2014: “Our preliminary view is hat Network Rail may not have done, and is not doing, everything reasonably practicable to comply with condition 1 of its network licence in relation to the delivery of its enhancement programme.”

ORR’s concerns centre on the GRIP 3 (single option development) and GRIP 6 (infrastructure ready for use) stages of Network Rail’s eight part GRIP (Guide to Rail Investment Process): “Network Rail missed 16 of 44 (36%) GRIP3 regulated outputs and 14 out of 40 (35%) GRIP 6 regulated outputs in 2014-15. Our analysis has shown that the 30 missed milestones (36% of all milestones) in 2014-15 relate to projects that vary by size, type, location and complexity.”

ORR research has identified the following areas of weakness in Network Rail’s enhancement delivery programme:

  • poor setting of project requirements (front-end definition) with inadequate change control against a baseline;
  • inadequate governance and challenge of projects as they pass through development gateways;
  • inconsistent consideration of safety issues during design and optioneering;
  • the accountabilities of the client, sponsor and deliverer are blurred, as projects move through their lifecycle;
  • cost estimation and risk functions are not adequately resourced or governed through the early project lifecycle;
  • no defined framework, tools and techniques for managing complex infrastructure programmes resulting in underestimates of timescales, costs and impact on operational performance;
  • absence of portfolio management capability to validate project reporting in terms of cost and schedule, for example by peer reviewing and challenging projects to provide early warning of failure or by better identification of shortages in critical resources
  • late requirements identified when handing asset over to operator;
  • land and consents issues underestimated;
  • unknown asset condition, resulting in late increases to scope and re-planning;
  • productivity is lower than planned;
  • weak assurance of compliance with safety legislation and standards;
  • inadequate and late technical files for authorisation under interoperability regulations.


Price says Network Rail’s project development and delivery weaknesses are “systemic, rather than the result of individual project failings or adverse circumstances”. He adds that Network Rail’s responses to ORR concerns have been “slow, localised and patchy.”

ORR has invited Network Rail to make representations by 1 September. “Following receipt of these representations we will consider what recommendations to make to our board about whether or not Network Rail is in breach, or has breached, its network licence. This is likely to be at the board’s next scheduled meeting in September 2015.”

At this stage it is not known what sanctions ORR would be able to impose on Network Rail (other than a financial one).

In a completely separate move, the ORR says Network Rail breached its licence during 2014-15, as performance delivery to passenger services on Southern, Govia Thameslink (GTR) and in Scotland, fell below expectations. ORR found no systemic weakness but criticised Network Rail for, “repeated errors on timetabling, lack of liaison with train operators and not planning ahead for passengers.” The ORR proposes a £2m financial penalty for NR’s impact on Southern and GTR – the problems in Scotland were less severe – adding, “Network Rail has the opportunity to offer reparations to affected passenger, instead of having to pay the fine.”

679/Aug 15


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