Network Rail

Network Rail is the government-created owner and operator of most of the rail infrastructure in Great Britain (England, Scotland and Wales). It does not include the other UK state operator, Northern Ireland Railways. Network Rail is a British "not for dividend" entity, technically a private company limited by guarantee, whose principal asset is Network Rail Infrastructure Limited, a company limited by shares.

Network Rail's main customers are the separate and mostly private-sector train operating companies (TOCs), responsible for passenger transport, and freight operating companies (FOCs), who provide train services on the infrastructure that the company owns and maintains. Network Rail does not itself run passenger or freight services; ultimately both Network Rail and the train operating companies have the shared responsibility of delivering train services to the travelling public.

History
Britain's railway system was built by private companies, but it was nationalised by the Transport Act 1947 and run by British Rail until re-privatisation in the 1990s. Infrastructure and passenger and freight services were separated at that time. Between 1994 and 2002 the infrastructure was owned and operated by Railtrack.

The Hatfield crash on 17 October 2000 was a defining moment in the collapse of Railtrack. The immediate major repairs undertaken across the whole British rail network were estimated to have cost in the order of £580 million and Railtrack had no idea how many more 'Hatfields' were waiting to happen because it had lost considerable in-house engineering skill following the sale or closure of many of the engineering and maintenance functions of British Rail to external companies; nor did the company have any way of assessing the consequence of the speed restrictions it was ordering, which all but brought the railway network to a standstill. The costs of modernising the West Coast Main Line were also spiralling. In 2001, Railtrack announced that, despite making a pre-tax profits before exceptional expenses of £199m, the £733m of costs and compensation paid out over the Hatfield crash had plunged Railtrack from profit into a loss of £534m and it approached the government for funding, which it then used to pay a £137m dividend to its shareholders in May 2001. Network Rail took over ownership by buying Railtrack plc, which was in "railway administration", from Railtrack Group plc for £500 million. The purchase was completed on 3 October 2002.

Following an initial period in which Network Rail established itself and demonstrated its competence in addressing the principal challenges of improving asset condition, reducing unit costs and tackling delay, the Government's Rail Review in 2004 White Paper said that Network Rail should be given responsibility for whole-industry performance reporting, timetable development, specification of small and medium network enhancements, and the delivery of route-specific utilisation strategies (RUS). Some of these are functions which Network Rail already had; others – such as the obligation to devise route utilisation strategies – were transferred to Network Rail from the Strategic Rail Authority, a non-departmental public body, part of the UK government. The SRA was subsequently abolished.

The company moved to its current headquarters at Kings Place, 90 York Way, from 40 Melton Street, Euston, on 26 August 2008.

On 3 October 2008, Sir Ian McAllister announced that he would not stand for re-election as chairman of Network Rail. He had held the position for six years. He noted that as Network Rail moved to a "new phase in its development" it was appropriate for a new chairman to lead it there.

Many track safety initiatives have been introduced in the time Network Rail has been responsible for this area. The latest, announced in December 2008, known as "All Orange", states that all track personnel must not only wear orange hi-vis waistcoats or jackets, but must also wear orange hi-vis trousers at all times when working on or near the track.

This new safety ruling came into force on 1 January 2009 for maintenance and property workers and on 1 April 2009 for infrastructure and investment sites.

Responsibilities


Network Rail owns the infrastructure, including the railway tracks, signals, tunnels, bridges, level crossings and most stations, but not the passenger or commercial freight rolling stock. Network Rail took over ownership by buying Railtrack plc, which was in "railway administration", from Railtrack Group plc for £500 million.

Although it owns over 2,500 railway stations, it manages only 18 of the biggest and busiest of them, all the other stations being managed by one or other of the various train operating companies (TOCs). Network Rail had a 15-year lease on Square One in Manchester with 800 staff in one of Manchester's largest refurbished office spaces.

Network Rail should not be confused with 'National Rail'. National Rail is not an organisation, but merely a brand, used to explain and promote a Great-Britain-wide network of passenger railway services. The majority of Network Rail lines also carry freight traffic; some lines are freight only. A few lines that carry passenger traffic are not part of the National Rail network (for example High Speed 1, Heathrow Express, Tyne And Wear Metro and the London Underground). Conversely, a few National Rail services operate over track that is not part of the Network Rail network (for example where they run on London Underground track).

The company's headquarters is at Kings Place, behind London King's Cross station. The current Chairman is Rick Haythornthwaite.

Infrastructure


In October 2003 Network Rail announced that it would take over all infrastructure maintenance work from private contractors, following concerns about the quality of work carried out by certain private firms, and spiralling costs. February 2004 saw the opening of an operations centre at Waterloo station in London, operated jointly by Network Rail and the train operating company South West Trains. This was the first full collaboration of its kind since privatisation, and it is regarded as a model for other areas of the network, with a further six integrated Network Rail + TOC Control Centres having opened since then, at Blackfriars, Croydon (Leading Control for First Capital Connect), Swindon, Birmingham, Glasgow and, most recently, Liverpool Street and South Wales based in Cardiff Canton.

Track renewal, the ongoing modernisation of the railway network by replacing track and signalling, continues to be carried out by private engineering firms under contract. The biggest renewals project is the multi-billion-pound upgrade of the London to Glasgow West Coast Main Line, which was completed in 2008.



Network Rail initially sub-contracted much of the work and the site to private Infrastructure Maintenance Companies such as Carillion and First Engineering. Other sub-contractors are used on site for specialist work or additional labour. These include Prima Services Group, Sky Blue, Balfour Beatty, Laboursite, BCL, Atkins (Atkins Rail) and McGinleys.

Since 2003 Network Rail has been building up significant in-house engineering skills, including funding of apprenticeship and foundation degree schemes. Network Rail reports significant savings resulting from the initial transfers of work away from contracting companies. Additional contracts were taken back by Network Rail after the serious accident at Potters Bar and other accidents at Rotherham and King's Cross led Jarvis to pull out of the track repair business. Shortly after this, and due to other failures by maintenance companies, Network Rail took control of many more maintenance duties.

Telecomms maintenance came full circle in April 2009 with the bringing in house of the staff of Thales Telecom Services Ltd (formerly British Rail Telecommunications (BRT)). In 2006, Network Rail made public a high-tech plan to combat the effects of slippery rail. This plan involves the use of satellites for tracking trouble areas, water-jetting trains and crews using railhead scrubbers, sand sticks and a substance called Natrusolve, which dissolves leaf mulch.

All workers working on, near or trackside have to undergo a Personal Track Safety assessment (re-assessed every two years) Network Rail workers undergo an assessment every year as part of AITL (Assessment In The Line). The AITL requires each worker to go through questions on a computer based program on all the competencies held.

The safety record of the company has been marred by the Grayrigg derailment, when a Virgin express crashed at Grayrigg in Cumbria on 23 February 2007. The train was derailed by a faulty set of points. Network Rail have admitted responsibility for the accident. The RAIB investigation is ongoing, and criminal charges may be brought.

In September 2007 it was announced that the number of track renewal contractors will be reduced to four from the current six. These are now AmeySECO, Balfour Beatty, First Engineering and Jarvis PLC.

Stations
Network Rail owns more than 2,500 railway stations, divided into six categories. Management and operation of most of them is carried out mostly by the principal train operating company serving that station; however, in a few cases the train operating company does not serve the station, for example Hinckley is managed but not served by East Midlands Trains.

Network Rail manages and operates 18 of the largest and busiest stations directly, including most of the main London terminal stations. The London stations are London Bridge, Cannon Street, Charing Cross, Euston, Fenchurch Street, Kings Cross, Liverpool Street, Paddington, St Pancras, Victoria and Waterloo. The company also operates Birmingham New Street, Edinburgh Waverley, Gatwick Airport, Glasgow Central, Leeds City, Liverpool Lime Street and Manchester Piccadilly.

Training facilities


Network Rail has several training and development sites around Britain. These include sites in Newcastle, Peterborough, Derby, Leeds, Watford and Larbert which provide refresher courses, and train staff in new equipment. Advanced Apprentice Scheme trainees are trained at HMS Sultan in Gosport within the whole the first year and over seven 2 week periods (throughout their second and third year) of their apprenticeship, using a combination of Royal Navy facilities and a specially installed training centre. Network Rail bought a residential centre from Cable and Wireless in the Westwood Business Centre near Coventry for leadership development. The company and other industry partners such as Grant Rail and Balfour Beatty, also operate a Foundation Degree in conjunction with Sheffield Hallam University.

In 2008, Network rail will pilot its first qualification in "track engineering". It has been given permission to develop courses equivalent to GCSE and A-levels.

Telecoms assets
Network Rail operates various essential telecommunication circuits for signalling and electrification control systems, train radio systems, lineside communications, level crossing CCTV, customer information systems as well as more general IT and business telephony needs. The fixed bearer network infrastructure comprises transmission systems and telephone exchanges linked by a fibre optic and copper cable network that is located mainly within trackside troughing routes on the former British Rail Telecommunications network.

Network Rail operates several analogue radio networks that support mobile communication applications for drivers and lineside workers which consist of base stations, antenna systems and control equipment. The National Radio Network (NRN) was developed specifically for the operational railway; it provides radio coverage for 98% of the rail network through 500 base stations and 21 radio exchanges. The RETB system is based on similar technology as the NRN and ORN but provides data communication for signalling token exchange as well as voice communication.

Fixed communication at the trackside is provided by lineside communication systems. These systems are primarily provided for signallers’ communication with drivers and the public through telephones located on signal posts and at level crossings.

GSM-R radio systems are being introduced across Europe under EU legislation for interoperability. In the UK, Network Rail have established a stakeholders board with cross industry representation to drive the UK implementation of GSM-R to replace the National Radio Network (NRN) and Cab Secure Radio (CSR) systems currently in use.

Rolling stock
Network rail operate a large variety of DMUs, locomotives and rolling stock to perform safety checks and maintenance. As well as the multiple units and locomotives detailed below Network Rail own and operate a large stock of rolling stock for particular testing duties and track maintenance. Network Rail also hire freight locomotives from DB Schenker and Freightliner among others to operate engineers trains at weekends. DRS provide a number of locomotives to power test trains around the network when Network Rail locomotives are unavailable or busy elsewhere.

The GRIP process
For investment projects, as opposed to routine maintenance, Network Rail has developed an eight-stage process designed to minimise and mitigate risks. This is known as the Guide to Railway Investment Projects (GRIP). The stages are as follows:
 * 1) output definition;
 * 2) pre-feasibility;
 * 3) option selection;
 * 4) single option development;
 * 5) detailed design;
 * 6) construction, test and commission;
 * 7) scheme hand back;
 * 8) project close out.

Each stage delivers an agreed set of outputs to defined quality criteria.

Control periods
For financial and other planning purposes, Network Rail works within 5-year "Control Periods", each one beginning on 1 April and ending on 31 March to coincide with the financial reporting year. These periods were inherited from Railtrack, so that the earlier ones are retrospective, and not necessarily of 5 years duration. They are as follows:
 * Control Period 1 (CP1): 1996–2001
 * Control Period 2 (CP2): 2001–2004
 * Control Period 3 (CP3): 2004–2009
 * Control Period 4 (CP4): 2009–2014
 * Control Period 5 (CP5): 2014–2019
 * Control Period 6 (CP6): 2019–2024
 * Control Period 7 (CP7): 2024–2029
 * Control Period 8 (CP8): 2029–2034

Route plans
Network Rail regularly publishes a Strategic Business Plan detailing their policies, processes and plans, as well as financial expenditure and other data. The most recent complete business plan was published in April 2007. Within these plans the rail network is divided into 26 Strategic Routes, with a Route Plan for each being published annually. The Business Plan and the Route plans were updated in 2008 and the Route plans again in 2009.

Each Route Plan covers a number of railway lines usually defined by geographical area and each route is further subdivided into Strategic Route Sections (SRS) and given an SRS number and name. The plans also detail the geography of routes, stations, major junctions, capacity constraints and other issues and provide data on freight gauge, electrification, linespeed, number of tracks, capacity and other information. The plans also detail the expected future demand and development of each route, their predicted expenditure and their maintenance and investment requirements.

The Route Plans and respective areas are organised as in the table below.

Formal governance structure
The company is accountable to a body of members through its corporate constitution, to its commercial train operator customers through its contracts with them (the contracts are subject to regulatory oversight), and to the public interest through the statutory powers of the Office of Rail Regulation.

Since Network Rail does not have shareholders, its members hold the Board of Directors to account for their management of the business. Members are appointed by an independent panel and serve a three-year term. They have a number of statutory rights and duties which include attending annual general meetings, receiving the Annual Report and Accounts, and approving the appointment or re-appointment of Network Rail’s directors. Members have a duty to act in the best interests of the company without personal bias. They receive no payments other than travel expenses.

Members have clearly defined and limited powers; they do not run the company. Setting the strategic direction and the day-to-day management of Network Rail is the responsibility of the company’s Board of Directors. That direction must be consistent with the regulatory jurisdiction of the Office of Rail Regulation, and with the requirements of its contracts. The Office of Rail Regulation in turn operates within the overall transport policy set by the UK Department for Transport and the Scottish Government, including as to what the Government wants the railway industry to achieve and how much money the Government is prepared to put into the industry. This means that the degree of Government influence and control over the company is higher than it was before these enlargements of the powers and role of the Government were introduced by the Railways Act 2005.

At any one time there are around 100 members in total, drawn from a wide range of industry partners and members of the public. There are two general categories of membership, industry members comprising any organisation holding a licence to operate on the railway or preferred bidder for a railway franchise, and public members who are drawn from the wider stakeholder community.

Monitoring Network Rail's performance
The Office of Rail Regulation monitors Network Rail's performance on a continuous basis against targets established by the regulatory authority in the most recent access charges review (2003), against obligations in the company's network licence and against forecasts in its own business plan. If performance is poor,the company will face criticism and possible enforcement action from its commercial customers (under their contracts) and from the Office of Rail Regulation (enforcing the company's network licence). It may also be criticised by its members in general meeting.

In the end of year report 2005/06, the ORR reported on train performance that: "Train Performance: Good progress has been made in improving punctuality. The Public Performance Measure (PPM) of 86.4% in the year is up from 85.5% (refreshed) at the end of the third quarter (Q3) and up from 83.6% last year."

Profit 1.For the first time in Network Rail's history a profit was made this year- allowing money to be reinvested into the network. 2.Train punctuality is at a seven year high. 3.Passenger numbers are at an all time high

Railway Industry Planning Group (RIPG)
The Railway Industry Planning Group (RIPG), chaired by Network Rail, has as its purpose railway industry input into the structure and development of the national railway strategic planning processes. Its members are drawn from railway funders, operators and users, and the group meets quarterly to consider:
 * rail industry liaison with regional and local government
 * Regional (and Scotland and Wales) Planning Assessments
 * Route Utilisation Strategies
 * specification of passenger operator franchises
 * High Level Output Specifications and Network Rail’s Strategic Business Plan
 * Network Rail’s Business Planning Criteria, Business Plan and Route Plans.

Private versus public sector status controversy
In 2001 the then Labour government denied that it had nationalised the rail network in order to prevent Railtrack's shareholders claiming, via the European Court of Human Rights, the four-year average price of Railtrack, about £10 per share. Instead, Railtrack's shareholders were given only £2.60. The commentator Simon Jenkins, writing in The Times, reported that Gordon Brown's aide, (now Lady) Shriti Vadera e-mailed Stephen Byers in July 2001 asking: "Can we engineer the solution through insolvency ... and therefore avoid compensation under the Human Rights Act?"

Railtrack plc was placed into railway administration under the Railways Act 1993 on 7 October 2001, following an application to the High Court by the then Transport Secretary, Stephen Byers. It was reported on 23 November 2001 that a further £3.5 billion might be needed to keep the national railway network running, a sum disputed by Ernst & Young, the administrators. To get Railtrack out of administration, the government had to go back to the High Court and present evidence that the company was no longer insolvent. The principal reason given by the government to the court for this assertion was the decision of the rail regulator - announced on 22 September 2002 - to carry out an interim review of the company's finances, with the potential to advance significant additional sums to the company. The High Court accepted that the company was not insolvent, and the railway administration order was discharged on 2 October 2002.

There has been considerable controversy over whether Network Rail is a public-sector or a private-sector entity. Although officially a private sector organisation, the fact that its debts are underwritten by the government, and it is partially funded by the government, has led to its being described as being "nationalisation in all but name". It is also claimed that the government is keen for Network Rail not to be classified as a public-sector organisation, as this would mean that the company's enormous debts (over £20 billion) would be counted as public expenditure liabilities.

The National Audit Office and the Statistics Commission both agree that Network Rail is a state-owned company. The Office for National Statistics has repeatedly clashed with the National Audit Office and the Statistics Commission over whether the successor to Railtrack should be considered a private company – as the ONS believes – or included on the Government's books, as the NAO argues. The NAO says that as the Government is bearing the risk that would normally be borne by equity capital, and as it can appoint, through the SRA, a director who cannot be removed by members, Network Rail is effectively a subsidiary of the Government-controlled SRA. The Statistics Commission, set up by the Government to ensure that statistics are trustworthy, is known to question the basis of the ONS judgment that Government guarantees given to Network Rail are unlikely to be called in.

Even though the UK Office for National Statistics insists that it is correct to have classified Network Rail as in the private sector the company is occasionally described as being in the public sector:
 * On 17 October 2002 in the House of Lords, government minister Lord McIntosh of Haringey, in answering a question, said: "The Question is about the West Coast main line, and it is true that the cost has escalated from a little over £2 billion to £10 billion. That shows incredible lack of control and forethought by Railtrack. We must get a grip of it, and we are getting a grip of it. However, we were able to get a grip of it only after it went into administration and we were able to take the company back again."
 * On 24 October 2005 in the House of Commons, former Secretary of State for Transport Stephen Byers MP said: "... I make no apology for ... unwinding the Tory privatisation that was Railtrack."  And on 1 February 2007, then Leader of the House of Commons (Jack Straw) said:  "... rail privatisation ... was one of the most catastrophic reorganisations, which we have had to resolve, and having done that— [ Interruption. ] The hon. Member for Wellingborough (Mr. Bone) may mock, but we brought Network Rail into public ownership..."
 * On 6 June 2008 during BBC Radio 4's programme Any Questions?, the Secretary of State for Innovation, Universities and Skills John Denham MP was asked about Network Rail's directors' bonuses; referring to the company, he said: "...it was a very good thing David that it was brought back effectively into public ownership after the total shambles that was created by dividing the railway up and privatising it."