ORR announces a package of measures to improve railway services in Scotland

5 June 2008
ORR/20/08

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 in Scotland. This will include more capacity, greater reliability 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 in Scotland by 21% by 2014, and expects the costs of delivering enhancements to be 17% less.

It judges that Network Rail will need £2.5bn in income over the period to deliver significant improvements in reliability, capacity and safety in Scotland, nearly £300m less than the company proposed.

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 Transport Scotland’s requirement for punctuality of First Scotrail services to increase to 92% by 2014. This compares with an expected level of 90.6% today.
• Improvements in capacity. Network Rail will deliver a new Glasgow Airport Rail Link; and enhancements from Airdrie to Bathgate to create better links between Edinburgh and Glasgow.
• 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, for Britain as a whole.
• Reduced levels of disruption to passengers and freight. Network Rail will be required to undertake increased levels of engineering work while ensuring that the railway is open for 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 improve its operating, maintenance and renewals efficiency by 21% during 2009-14, compared with the 13% improvement the company has proposed.

ORR’s analysis demonstrates that there may be an opportunity to fund further projects within the public funding that has been made available. It will be discussing how this may be taken forward with Transport Scotland shortly.

Bill Emery, ORR chief executive, said: “Since 2005, Scottish Ministers have been responsible for both the strategy and the public funding needed to support railway services in Scotland. During this time, the network has seen impressive growth and the ORR is satisfied that Network Rail has been engaging with stakeholders and funders and has achieved significant improvements in performance and efficiency. However, there are major opportunities to build on this progress over the next five years, and for Network Rail to deliver more in Scotland.

"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 research that has provided strong evidence to show 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 better 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:

• Train punctuality for Scotrail at the end of Q4 was 90.6%, an improvement of 1.8% over Q4 in 2006-07.
• Network Rail was well ahead of both the regulatory and business plan target for 2007-08 as delay minutes for the year reduced by 16%.
• The number of infrastructure incidents causing delay in Scotland fell by 11% over the year.
  

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 Scotland  and England & Wales 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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ORR Press Office – 020 7282 2188/2007