NEWS


he majority of rail industry players welcomed Sir Roy’s report, with the key exception being the rail unions, who saw several ways in which the study’s recommendations could threaten their members’ pay and working conditions.


T Operators


ATOC chief executive Michael Roberts welcomed the findings, which he said “rightly recognise” the importance of the right incentives, franchise reforms, the fares review and infrastructure devolution.


He said ATOC envisages a “new relationship between the public and private sectors” with less Government involvement.


The McNulty review does not go as far as ATOC would like in terms of integrating track/infrastructure with passenger service operations – its own proposals earlier this year would have amounted to the break-up and semi-privatisation of Network Rail. But McNulty does suggest more integration is necessary and for ‘pilot projects’ on routes like Anglia or Merseyrail.


Freight


The Rail Freight Group welcomed the report and said it was pleased at the praise given in the report to the freight side of the industry, which is contrasted favourably by McNulty to passenger services in many ways, but it warned against his more “radical proposals”.


RFG policy manager Maggie Simpson said: “There is still particular concern over proposals to restructure the industry and pass control to train operators. This is something the RFG will be paying close attention to in the future.”


Alain Thauvette, chief executive of DB Schenker Rail (UK) Ltd, said: “We look forward to working with others in the industry through the Rail Delivery Group to realise the ambitions in the McNulty review to deliver lower costs for


6 | rail technology magazine Apr/May 11


McNulty’s ‘principal barriers’ to a better value railway


• Fragmentation of structures and interfaces;


• The ways the roles of Gov- ernment and industry have evolved;


• Ineffective and misaligned in- centives;


• A franchising system not fo- cused on cost reduction;


• Management approaches; and


• A railway culture lacking part- nership and continuous im- provement.


The increasing cost of the railway


There was a £2.7bn increase in ‘passenger revenue’ between 1996/97 and 2009/10, matching the increase in Network Rail’s net revenue requirement.


However, there was an ad- ditional £2bn rise in TOC and ROSCO operating charges.


costs and


Government subsidy over the period rose by £1.7bn.


McNulty’s verdict on British Rail


“While the budgetary con- straints under which British Rail operated may have been too severe at times, and prob- ably contributed to a significant backlog of investment, those constraints were arguably more effective in controlling industry costs and finances than the post-privatisation control re- gime has been.”


the taxpayer and achieve greater efficiency for users. Success here will result in more freight by rail, something that the rail industry, our customers, the taxpayer and the Government wish to see.”


Engineers


Professor Rod Smith, president- elect of the Institution of Mechanical Engineers, suggested he was disappointed the review did not go further, despite the fact that it included “some welcome proposals”.


He said: “The report falls short of recommending a wholesale restructuring of the railways and it will remain to be seen whether the proposals will be enough to address the inefficiencies of the current system.”


Unions


Leader of the TSSA union, Gerry Doherty said hiking off-peak fares and cutting wage bills was the “wrong answer”, and blamed privatisation of what he said should be a public service industry.


He said: “Rail now costs the taxpayers £5bn a year and we now have 100 private companies living off that publicly-funded bonanza.”


ASLEF general secretary Keith Norman called the report “seriously flawed in several areas”, condemning the proposals to give private companies more involvement in track and infrastructure, the potential ‘downgrading’ of rural lines, and the recommendation to clamp down on pay.


RMT general secretary Bob Crow focused his ire on rail privatisation and its financial impacts, such as the huge number of lawyers negotiating every aspect of rail franchises and track access. He said: “The inefficiencies of the UK rail system are entirely bound up with the fragmentation and profiteering of privatisation. The McNulty report tacitly accepts that but does nothing to address the issue.”


Suppliers


The Railway Industry Alliance (RIA) was particularly pleased at the proposals centring on closer ties between industry partners.


Its director general, Jeremy Candfield, said: “Initiatives such as RIA’s


Value Improvement


Programme have already demonstrated the benefits that can be achieved through a greater level of collaboration,


and suppliers


are ready and willing to play their part.


“We endorse too the Study’s findings that volatility of demand and lack of early supplier involvement are key drivers of inefficiency that must be remedied.


“The Study’s strong emphasis on evolutionary change rather than sudden revolution is absolutely the most efficient option.”


The Rail Delivery Group


Tim O’Toole, chief executive of First Group, is to chair the new Rail Delivery Group, while Network Rail chief executive David Higgins will be vice-chairman.


O’Toole said: “This important


group will form the nucleus of a new rail industry order that will provide leadership on cross- industry issues to enable delivery improvements for rail users and for the taxpayer.


“The train operating companies and devolved Network Rail teams will remain accountable for delivery at a local level.”


The RDG will “steer and take ownership” of the Initial Industry Plans (IIP), due for publication in September, ahead of the final decisions on industry funding in Control Period 5 from 2014 to 2019.


The RDG is meeting monthly, at first, and will have input from Sir Roy himself to ensure his recommendations are taken forward in the most effective way.


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