COMMENT
Anooj Oodit, director at global infrastructure and property fi rm Turner & Townsend, explores the relationship between fare rises and investment on the UK rail network.
an average of 8% next year were as under- standable as they were predictable.
T
The level of RPI infl ation – on which regu- lated fare increases are based, has been doggedly high all year.
Add to this the fact that the Government has just changed the formula used to calcu- late fare rises from RPI plus 1% to RPI plus 3%, and a hefty increase was inevitable.
So while the price hike came as no surprise, it still went down poorly with Britain’s long-suffering rail passengers.
Yet the Government’s decision to change the fare increase formula is clear evidence of a shift in offi cial policy – and a rebal- ancing of the way Britain’s railways are funded.
At its heart is the move from a taxpayer- funded to fare payer-funded model.
In an effort to reduce the budget defi cit, the Government plans to cut its rail subsidies. Yet it hopes to maintain spending on the railways by placing more of the cost burden onto rail users.
Debates over the fairness or otherwise of this policy often divide on regional or party political lines.
Yet few would argue against the huge ben- efi t that a better, more robust railway net- work would deliver to the economy and the country as a whole.
The fact is that much of the UK’s rail infra- structure is simply not up to the job after years of underinvestment.
The way Britain moves is changing. As high fuel prices keep more of us off the road, rail passenger numbers are steadily increasing. As a result train overcrowding is getting worse; and if nothing is done this trend will only continue.
26 | rail technology magazine Aug/Sep 11
he cries of dismay which greeted the news that UK train fares will rise by
From an industry perspective, we support anything that will bring the UK’s rail infra- structure up to date.
But it’s not enough just to write a cheque – the extra money generated by the increased fares must be spent effi ciently and with clear oversight.
At Turner & Townsend we’ve worked on a string of major rail projects around the world. While many factors vary from pro- ject to project and market to market – time is always a key cost driver, especially the time it takes to move from the approvals process to delivery and maintenance of the railway assets.
To make the money go further, the Govern- ment should streamline the planning pro- cess. The Localism Bill currently wending its way through parliament will provide a good start.
Turner & Townsend has worked on rail projects in the UK, Canada, Australia and the Middle East. Our experience has shown us that whatever the country, any invest- ment programme should be backed by an assurance regime that not only informs but also supports and drives performance.
It should have a resolutely elitist approach to innovation – where the best innovation always succeeds, and all commercial agree- ments should be designed to incentivise high performance.
Plans for effi cient investment programmes often resort to the old saw “we have to do more with less”.
The problem, though, is that the focus is usually on the “less” - and the “more” rare- ly happens. The way to get to that elusive “more” is to focus on actively and creatively searching for ideas which will achieve out- comes without using a disproportionate amount of resources.
The Government should focus on and measure the delivery of outcomes within
the fi nite resources available. Rather than concentrating solely on delivery on time and to budget, the Government should look at benefi t realisation with the available re- sources.
If the investment has achieved a tangible and pre-agreed goal – for example a train service running every fi ve minutes – it can be judged a success.
As for cost control, cheaper sourcing does not mean compromising on quality, but implies a recognition that some services and materials can be bought cheaper with- out having an impact on performance.
We work in a truly international market, and costs can be kept in check through bet- ter market intelligence of the aggregated global supply chain, and innovation in con- tracting mechanisms.
Large capital investments like this can and should be run on the same principles as commercial asset management.
Effi cient management will allow client or- ganisations to obtain the optimum return from their assets, even in the current tough economic environment and with limited capital expenditure.
This is likely to be achieved not by creating new assets but by making existing assets work harder and more effi ciently.
This summer a government report called for a big shake up in the way Britain’s rail networks are run.
Visit
www.turnerandtownsend.com Anooj Oodit
There is much to do to streamline the cur- rent fragmented and confused rail system. But an effi ciently managed investment programme would be a fl ying start.
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