News Britain’s DfT agrees to implement franchising reforms
David Briginshaw Editor-in-chief
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HREE main causes have been identified for the
failure of the West Coast Main Line franchise competition by an inquiry conducted by Mr Sam Laidlaw (right), CEO of Centrica and a non-executive board member of the Department for Transport (DfT). The report says the competition failed because of an accumulation of significant errors related to inadequate planning and preparation, a complex organisational structure, and a weak governance framework. Discovery of the flaws led to the cancellation of the competition on October 3 by the transport secretary Mr Patrick McLoughlin, resulting in the suspension of all other franchise competitions in progress.
Laidlaw’s final report finds that the DfT used flawed and inconsistent methodology when guiding bidders on the amount of risk capital, known as the Subordinated Loan Facility (SLR), to offer to guarantee their franchise against default. The SLR figures were then varied in contravention of the DfT’s own franchise competition rules. Finally, ministers awarded the contract
will implement all of Mr Laidlaw’s recommendations, and go further, to ensure we have the right set of skills, support and training to ensure failures like this do not happen again.”
The DfT says it will ensure
provisionally to First Group on August 14 on the basis of inaccurate reports and without being told about the critical flaws.
“The final report from the Laidlaw Inquiry makes extremely uncomfortable reading for the Department,” says McLoughlin. “It has identified precisely what went wrong, revealing serious failures, as well as offering us a number of sensible recommendations to put things right. We will not allow these mistakes to be made again and the Department is determined to ensure all future franchise competitions are conducted on the basis of sound planning, the rigorous identification and oversight of risk, and the right quality assurance.”
Mr Philip Rutnam, the DfT’s permanent secretary, says: “We
future franchise competitions are delivered at a good pace based on sound planning, a clear timeline, rigorous management, and the right quality assurance. It will create a simpler and clearer structure and governance process for franchise competitions, including the appointment of a director general responsible for all rail policy and franchising.
The DfT has yet to indicate how long it will take to implement Laidlaw’s recommendations and when the franchising process can resume. A second more wide- reaching report into rail franchising is being conducted by Mr Richard Brown of Eurostar, and was due to be completed by the end of 2012. In the meantime, Virgin
Trains has been granted a 23-month contract to manage West Coast long-distance services in which the DfT will bear the financial risk and Virgin will receive a 1% margin on revenue. This will allow time to let a new long- term franchise.
Network Rail speeds up switch replacement: British infrastructure manager Network Rail (NR) and Balfour Beatty Rail have completed the first full track and ballast modular switch & crossing (S&C) replacement during a midweek possession. The switches were installed at Wool and Wareham on the Bournemouth - Weymouth line in southern England over four successive night time possessions. Modular S&C was conceived in 2006 with the aim of reducing the average possession time for installing a traditional crossover from 52 hours to 21 hours. NR acquired a fleet of specially-designed wagons with tilting decks which allow switches to be delivered to the worksite as pre- assembled modules without exceeding the loading gauge.
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PR secures funds for urgent repairs
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HE National Bank of Pakistan (NBP) announced on November 13 it will provide cash-strapped Pakistan Railways (PR) with a Rs 6.1bn ($US 63.7m) loan to revive its depleted locomotive fleet. The agreement was signed by the NBP and Pakistan Railway Advisory & Consultancy Services (Pracs) a subsidiary of PR and will allow 96 diesel locomotives to be returned to service. PR’s revenues have been decimated in recent years by declining volumes caused largely by a chronic shortage of serviceable locomotives. The Pakistani government says tenders for procurement of 150 new locomotives are currently being evaluated. Last October Indian Railways agreed to sell 50 locomotives to PR at a cost of Rs 35m and lease a further 50 units for Rs 21,000 per day.
Construction to start soon on China - Laos link?
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ONSTRUCTION of a 418km standard-gauge line linking the Laotian capital Vientiane with the Chinese network could begin this year. The Vientiane Timesquotes Laotian public works and transport minister Mr Lattanamany Khounnyvong as saying the two countries were finalising details of the loan agreement with the Exim Bank of China to finance the $US 7bn project. According to the newspaper, feasibility studies have been completed and a Chinese contractor will be selected soon on the mixed-traffic line, which will run from Xishuangbanna in China’s Yunnan province to Luang Namtha, Luang Prabang, Vang Vieng, and Vientiane. The project will require the construction of 76 tunnels and 154 bridges. Initially proposed as a joint
project between the two countries, construction is now being taken forward solely by Laos following approval of the plans by parliament.
IRJ January 2013
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