The scale of Network Rail’s “systemic” failings were laid bare in a damning report yesterday, which revealed that a third of railway upgrades were running late and that key project costs were spiralling out of control.
An investigation by the rail watchdog found that 36 per cent of targets to complete work, such as new stations, extra track capacity and the electrification of lines, had been missed over the past year.
The Office of Rail and Road warned that average delays of more than six months had been recorded on big projects, affecting work on ten out of fourteen routes. It meant that train operators did not have the “confidence they need to plan their businesses effectively”, it was claimed.
The watchdog also raised concerns over a “significant increase” in costs, with two thirds of projects assessed going over budget, including one by 113 per cent.
It concluded that Network Rail was in breach of its operating licence by failing adequately to “plan and deliver” £13 billion of enhancements over the present five-year period.
Advertisement
The conclusions will pile fresh pressure on the company, which was fined £2 million by the ORR in August over the poor day-to-day maintenance of the rail network.
Earlier in the summer, the government also suspended work on the upgrades of two of the country’s most congested lines because of cost overruns and missed targets. It led to the removal of Richard Parry-Jones, Network Rail’s chairman, and the appointment of Sir Peter Hendy, the London transport commissioner, to lead the organisation.
A series of reviews have been launched into the organisation and ministers have announced an overhaul of Network Rail’s funding.
Yesterday’s report suggests that problems with big projects are more widespread than previously disclosed. In a letter to Network Rail, however, the watchdog said that a fine would not be imposed for the latest licence breach because the company was taking “positive steps to identify and address its weaknesses”.
Network Rail has drawn up an enhanced plan setting out how it will get projects back on track. Richard Price, the ORR’s chief executive, said that the plan was “fundamental to ensuring delivery of enhancements on time and budget for passengers and customers . . . ORR has been closely monitoring the company’s progress and has found evidence of weaknesses in Network Rail’s capability to develop and deliver major infrastructure enhancement projects. Network Rail’s response to our investigation findings has been positive and collaborative.”
Advertisement
Network Rail is carrying out £38.5 billion of work in the period from 2014 to 2019. This includes £13 billion on big project enhancements, with a similar amount on renewals of existing infrastructure and day-to-day operations.
The ORR investigation into the company found that “project development and delivery weaknesses are systemic rather than the result of individual project failings or adverse circumstances”. The regulator found that 11 out of 16 projects were over-budget, including one for work between Kettering and Corby that was 113 per cent over.
A Network Rail spokesman said that the company had delivered more than 5,000 projects worth more than £15 billion since 2009, and added: “The projects set before us for our current five-year funding period to 2019 were bigger and more complex than ever and required a step-change in delivery — both for the company and its supply chain — that we have collectively not been able to achieve.
“Despite this, over three quarters of our regulatory project milestones have been delivered to time or within weeks of target. But we know we can and must do better, which is why we set up a special board-led taskforce to strengthen our major project delivery.”