Getting asset management
right is the key to unlocking everything else : efficiency, performance, capacity and safety
A year into his role as head of the ORR, Richard Price tells Katie Silvester how Network Rail is progressing with its efficiency improvements
T
he Office of Rail Regulation (ORR) is in the middle of one of the busiest periods in Network Rail’s funding cycle, which it oversees. The government has just
announced its High Level Output Specification (HLOS) for Control Period 5 (2014 to 2019), which sets out what rail projects will be funded (see page 17). The ORR acts as a go-between for the DfT and Network Rail, scrutinising Network Rail’s plans and financial reckoning on behalf of the department. To put it in a nutshell, the DfT says what it wants
from Network Rail and the funds that are available. Network Rail comes back and says: ‘We can’t do all this for that amount of money.’ And the ORR negotiates with Network Rail about which bits can be done more cheaply, or delayed, until an agreement is reached about exactly what will go ahead for what cost. At the same time, there is constant pressure on Network Rail to improve its efficiency and reduce its costs.
CEO Richard Price has been in post for just a
year, so this is the first HLOS he has worked on. Network Rail’s job is really only about one thing, reckons Price – asset management. ‘I think Network Rail has achieved a lot over the
last decade. It really bears repeating that its costs have already come down over the past 10 years by 40 per cent and it has achieved levels of punctuality across the system. Customer satisfaction is close to record levels and it’s had a transformation in that period and that’s something that it should be proud of.
‘But there are still huge challenges. Its costs are still too high by any measure. It’s got big challenges in delivering the commitments that it made in the last periodic review, most obviously around punctuality. And it’s got a lot of work to do in ensuring that it really understands its asset base and has world-class management practices. Getting asset management right is the key to unlocking everything else: efficiency, performance, capacity and safety.’ But Price says he is impressed with the approach Network Rail’s new CEO David Higgins is taking to asset management. A big part of Price’s job is to drive Network Rail’s efficiency targets. Various studies have found that the infrastructure owner’s European counterparts are usually able to run their operations more cheaply than Network Rail – and a key part of the McNulty value-for-money study focused on finding ways >
AUGUST 2012 PAGE 9
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