Interview
South West Trains is working on an even deeper alliance with Network Rail’s Wessex region, which will see the line between Toc and Network Rail become even more blurred. If successful, it could become a blueprint for other areas of the country. ‘In terms of alliances, again it’s early days,’ says Price. ‘I’m encouraged by what I’ve seen so far in the Wessex and south-west alliance. We’re conscious that there are concerns from third party operators about the extent to which they could be discriminated against by that alliance, so we’ll be watching very carefully for that.’ Confusingly, Price refers to passengers as
‘customers’, even though Network Rail rarely has a direct relationship with passengers. Network Rail itself usually uses the term ‘customers’ to refer to the Tocs it serves.
to cut costs on infrastructure management. The organisation has efficiency targets to meet each year. ‘Network Rail has already said it can achieve significant savings through the five years of the next control period, roughly at the low end of what Sir Roy McNulty’s report looked at. We have our analysis, which draws on a range of comparators – railways in other countries, comparisons across the UK rail network and comparisons with other sectors suggest that actually Network Rail could go significantly further. What we’re doing through the periodic review is really probing that to make sure that we all have a clear sense of what the network ought to cost on the best asset management, best use of technology, best deployment of the workforce and productivity.’
The biggest impact that the McNulty report has had on Network Rail has been its move to devolution. Its former regions have been split into standalone businesses, which are supposed to be working more closely with the Tocs they serve. Although the further fragmentation of the industry will no doubt see some costs rise, in the long run these closer local relationships are aiming to reduce costs by avoiding the bureaucracy associated with Network Rail when it was a single organisation. So has Price seen any areas of improvement here? ‘Devolution is a really good thing,’ he says. ‘It’s early days – I think we have to see how this works. It helps to make the cost of various things much more explicit, but there’s much further to go in terms of improving transparency in terms of just what it is that customers and taxpayers are funding.’
‘Asset management plans are not something that customers really see, but if you’re a passenger and your train is delayed because a piece of track or a structure has failed or there’s a speed restriction, it does impact on you. Or if you’re a taxpayer and you’re paying a lot more for a piece of infrastructure than it would cost if it was in another country, you want to know why that is. Actually, the asset management is key to getting a lot of those things right.’ On a day-to-day basis, Network Rail is judged mainly on its punctuality achievements, as Tocs are under most pressure to get that right for their customers. Network Rail has missed its targets on freight punctuality and long-distance passenger trains, so Price and his colleagues have asked freight operators to convene a freight recovery board and to meet with the freight industry to discuss its concerns. ‘On long distance, we have significant concerns
that Network Rail is not meeting the commitments it was set up for, through the last periodic review. It is close to record levels, but it is not at the level that Network Rail committed to and took funding for.’ In the past, the ORR has become involved in the bonus rows that seem to ensconce Network Rail each time executive bonus payments come around. The daily papers always make a fuss about how high the bonuses are, but don’t really take on board
Curriculum vitae 1967 Born in Port Talbot, South Wales 1989 BA and MSc in Economics, University of York
1989 Economist, HM Treasury 1993 Works for NERA, economic consultancy 1997 Looks at reforms to criminal justice system for HM Treasury and Home Office
2000 Works for prime minister’s Strategy Unit 2001 Leads the Enterprise and Business Team at HM Treasury
2006 Chief economist and director of performance, Defra
2011 Chief executive, Office of Rail Regulation
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