It’s what might be termed an ‘eclectic mix’ of topics in this month’s Informed Sources. Following an in-depth look at future DMU policy, you’ll find an analysis of the gap between Network Rail’s spending plans and the Office of Rail Regulation’s Final Determination, more on Network Rail’s ineffiency relative to other railways and an overview of the troubled world of transport smartcards.
As pointed out in earlier columns, even if the Rolling Stock Companies can find the money, the last thing you want to invest in is a Diesel Multiple Unit. You will need 30 years to get your investment back, let alone make a profit, and uncertainty abounds. Oil shortages, premature replacement by electrification, developments in power systems. DMUs are not where you would like your pension fund invested.
DMU prices are also soaring, but when you don’t want many trains you loose the economy of scale. Assuming any manufacturer, other than Bombardier, is willing to build new
If you include the 300 cars in my analysis of the Fabled HLOS 1300, I reckon we will have 3,000 DMU vehicles to see us through to, say 2020. Of these, half are ex-British Rail units (MOLA fleet) built between 1984 and 1993.
DfT Rail is already talking to the ROSCO about life extending the Class 150s. When you get onto the Class 156 and Class 158 fleets, life extension would allow them to run on past 2020.
What about the Pacers? They’re going to have to be life extended too.
So if the MOLA fleet DMUs are going to be with us to 2020 and beyond, now is the time to start planning that major re-engineering programme. The earlier the programme starts, the longer the ROSCOs will have to get their money back and the longer the pay back is amortised the more you can afford to spend.
Remember that about five years ago Angel Trains proposed a major life extension for its IC125 fleet. Not just modern diesel engines but retention toilets and even power doors. The proposal was ‘shot to pieces’ by First Great Western, only for the HSTs to be needed until 2020 (at least). But the delayed decision meant a plain vanilla specification.
And one reason for my piece this month is to try to prevent the same mistake with the ex-BR DMUs.
ORR published its final ‘Determination of Network Rail’s outputs and funding for 2009-14’, all 447 pages of it, on 30 October. The big question was whether ORR had made any concessions to close the gap between NR’s view of its funding requirements and the Draft Determination. Network Rail in its updated Strategic Business Plan (
But, of course, it’s not that simple. There is also the ‘Expenditure Gap’, where Network Rail reckoned it needed to spend £31.143 billion to deliver the HLOS while ORR’s Draft Determination concluded that an efficient Network Rail would need only £27.763 billion, a gap of £3.38 billion.
Network Rail accepted some reductions in the Draft Determination, which cut the expenditure gap to £2.578 billion and in the final Determination ORR has taken some of Network Rail’s points on board. The end result is that gap is now nearer £2.1 billion.
As I was writing this Network Rail Chief Executive Iain Coucher said that in view of the more generous settlement he was minded to accept the Final Determination. Has ORR been rolled over? I don’t think so – but we won’t know until the back-ended efficiency savings are delivered (or not) at the end of CP4.
Off course, in the column all this is backed up by Tables galore. Note, in particular those showing the ‘affordability of the HLOS’. While there is still enough money in the SoFA to fund the HLOS, the ‘headroom’ for
Why does this matter? Because the SoFA has to pay for everything, not just Network Rail. And that ‘everything’ includes the mythical 1300 HLOS vehicles. With train prices and the cost of the money to fund them rising, and, potentially, fare box revenue starting to level off as the recession bites, we could see an old-fashioned railway funding crisis emerging.
The big battle in the Periodic Review has been not about money, but about NR’s efficiency. In reviewing NR’s spending plans ORR claimed that its analysis showed that Network Rail was 37% less efficient than the top 25% of 13 European railways. ORR said that this should be recovered over two Control Periods (10 years), but wants two thirds of the improvement taking place in Control period 4 (2009-2014)
In its response to the Draft Determination Network Rail launched a furious counter-attack, employing consultants to rubbish ORR’s analysis. Bad move: because ORR simply mobilised more consultancy studies of NR’s inefficiency to mount a crushing counter strike.
At the heart of the argument is the International Union of Railways’ Lasting Infrastructure Cost Benchmarking (
What really got up ORR’s nose was that, with its consultants ITS, it had been ‘working closely’ with Network Rail on the analysis since April 2007. ORR said it was ‘surprised’ (code for ‘seriously miffed’) that Network Rail’s response ‘appears to dismiss the notion of a significant efficiency gap with its European peers.’
And then the Regulatory Dogs went to work. Having revalidated the
This column has a number of specialised subjects which the rest of the railway press tends to report at face value - if at all. One of these is smartcards where DfT has just launched a review of national smartcard policy – or rather, non- national policy at present. DfT also has a parallel review under way into its brainchild ITSO Ltd. ITSO used to stand for Integrated Transport Smartcard Organisation but now it’s just a name.
Two reviews on different aspects of the same activity spell trouble in any Government department. So I thought it was time for this Informed Sources tour d’horizon of another fine mess from the Puzzle Palace where a lot is happening – or not. It will also provide a reference for more to come in the new year.
Since I wrote the column things have moved on, allowing me to provide a further update – one of the reasons for e-Preview. First of all, on Oyster, Cubic and
That’s the good new. However, ITSO is in even deeper trouble. The Scots have risen and are challenging ITSO’s decision to withdraw recognition of the MiFare Classic smart card – used widely by local authorities north and south of
Life has been even more interesting recently with the birth of our second granddaughter last week. While on standby to look after 23.001 (an in joke for Modernisation Plan traction enthusiasts), I limited days out. Joining the Editor for an interview the new Transport Secretary had to be missed, but I still managed to cover some useful events like the IRSE’s evening meeting where there was an excellent presentation on Network Rail’s signalling and operational strategy. It’s a long standing argument as to whether the signal engineer determines the timetable through the signalling layout or the operator, through the timetable, determines the signalling. And ETCS will involve big changes in operating practice.
As I helped plan the Second CILT Annual railway conference held last week you might expect me to praise it. In the planning I was keen to add traction and rolling stock issues to the usual emphasis on infrastructure and organisers Waterfront attracted John Smith, a Member of the Competition Commission, Haydn Abbot of Angel Trains, and
This coming week, I’m taking part in a round table on railways at the Houses of Parliament and on Friday it’s the Golden Spanners awards at the Fourth Friday Club, including two champagne challenges. In the first week in December
On 10 December it’s the Rail Freight Group Christmas lunch when wall-to-wall Informed Sources give the notebook another pummelling. Then, when the January column is out of the way – including the Informed Sources annual rolling stock reliability review, writing stops and the run into Christmas starts.
Well that’s the theory. Meanwhile, thanks for all your good wishes ahead of last month’s internal exam. The colonoscopy showed every thing to be normal. I think they must have overdone the relaxant because I fell asleep during the process!