ORR announces a package of measures to improve railway services

5 June 2008
ORR/19/08

The Office of Rail Regulation (ORR) today set out plans that will enable the rail industry to deliver much more for passengers and freight customers. This will include more capacity, greater reliability, higher frequency and longer trains, faster journey times and new through journey opportunities, and less disruption, all at a lower cost than today.

In its draft determinations on Network Rail’s outputs and access charges for control period 4 (from April 2009 to March 2014), ORR has set a challenging and achievable target for Network Rail to reduce operating, maintenance and renewals costs by 21% by 2014. It judges that Network Rail will need £26.5bn in income over the period to deliver significant improvements in reliability, capacity and safety.

ORR has confirmed to the Secretary of State for Transport and Scottish Ministers that the improvements they were  expecting from the railways over that period are affordable.
ORR is also consulting on changes to Network Rail’s network licence, aimed at clarifying the company’s obligations and strengthening its accountability.

The key improvements to be brought about by this determination are:

• Improvements in reliability. ORR has confirmed the deliverability of the governments’ requirements for punctuality to increase to 92.6% across England & Wales and at least 92% in Scotland by 2014. This compares with an expected level of 90.6% across the network in 2008-09. In England &Wales the number of passenger trains that are significantly late or cancelled must improve by between 21% and 36%. Delays caused to freight trains by Network Rail must reduce by more than 25% compared to 2008-09 levels.
• Improvements in capacity. Network Rail will need to deliver a major programme of projects across the network so that it can accommodate growth in passenger and freight traffic. Schemes in England & Wales include: increasing capacity on the Thameslink route by lengthening platforms and other means such as relieving the track bottleneck at London Bridge; rebuilding Reading station and removing the track bottleneck in the area; rebuilding Birmingham New Street station; improvements in capacity in Cardiff; improving the line speed of the Midland Main line; and providing capacity relief to the east coast Main Line through development of the line from Peterborough to Doncaster. Schemes in Scotland include: a new Glasgow Airport Rail Link; and a new line from Airdrie to Bathgate. Network Rail will deliver many smaller scale schemes, including extensions to more than 500 platforms to accommodate longer trains. The scale of the enhancement programme is more than twice the level in the current control period.
• Improvements in safety. Network Rail must comply with its legal safety obligations and we expect to see continuous improvements in the company’s safety performance. Network Rail must work with its industry partners to deliver the 3% reduction in the risk of death or injury to passengers and rail workers from accidents on the railway.
• Reduced levels of disruption to passengers and freight. Network Rail will be required to undertake these increased levels of engineering work while ensuring that the railway is open for as much of the time as possible and the disruption to passengers and freight is reduced.
• Efficiency improvements by Network Rail. Network Rail will need to become more efficient. ORR has collected strong evidence that there is significant potential for Network Rail to improve its efficiency by more than the company proposes. ORR expects Network Rail to reduce its operating, maintenance and renewals costs by 21% during 2009-14, compared with the 13% improvement the company has proposed.

Bill Emery, ORR chief executive, said: “Britain’s railway network has seen impressive growth over the last few years, and has achieved significant improvements in performance and efficiency. There are major opportunities to build on this progress over the next five years; and for Network Rail, working with its industry partners, to deliver much more for passengers and freight customers for less money.

"Our draft determinations are the result of three years hard work across the industry. We have carefully reviewed Network Rail’s plans, and produced determinations that are challenging and achievable. We have carried out detailed studies that have produced strong evidence to show that the company can make significantly greater efficiency improvements than it has assumed in its plan.

“The scale and pace of change will require Network Rail to strengthen its capabilities, look to introduce new technologies and ways of working, and develop more effective partnerships with its direct customers and suppliers. These improvements are all consistent with Network Rail’s own vision of becoming a world-class company, and providing a better deal for passengers, freight customers and taxpayers.

“We will monitor Network Rail’s progress in delivering all of its obligations and the improvements required. We look forward to reporting on its success. However, if it is failing or appears likely to fail, we will not hesitate to take action to require the company to address its shortcomings.” ”

ORR also today published its Network Rail monitor for quarter 4 of 2007-08. Highlights include:

• For the second quarter in a row train punctuality hit a ten-year high (89.9% MAA).
• Network Rail achieved its lowest annual total in eight years for infrastructure failures that led to delays.

However, performance on Network Rail’s Western route remained poor throughout the year, with delays caused by Network Rail being a significant factor. A joint performance improvement plan (JPIP) has been agreed for the year 2008-09.

Notes for editors

1. Periodic review 2008: Draft determinations is published by ORR and is available on the ORR website at http://www.rail-reg.gov.uk/upload/pdf/368.pdf.
2. In the current five-year control period (from 1 April 2004 to 31 March 2009) Network Rail’s total revenue requirement is £28.1bn.
3. The improvements in the reliability of train services, measured by the public performance measure, are set out for the different sectors in England & Wales: 93% for London & south east services, 92% for long distance and regional services in England & Wales.
4. Governments in England & Wales and Scotland published their respective high level output specifications (HLOSs) and statements of funds available (SoFAs) in July 2007. Network Rail responded to the HLOSs by producing an industry strategic business plan (SBP) at the beginning of November, and its SBP update in April 2008. ORR published its advice to ministers and framework for setting access charges in February 2007, and its update on the framework for setting outputs and access charges and SBP assessment in February 2008.
5. The consultation period on the draft determinations and the licence changes runs until 4 September 2008, and ORR will publish its final determinations on 30 October 2008. Following the final determinations detailed price lists and access charge schedules will be audited and published on 18 December 2008.

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