Forum Brief: Rail maintenance

Britain's rail maintenance is to be taken in-house by Network Rail after the company found that using private contractors was wasting hundreds of millions of pounds of public money.

The company believes it can save £200 million a year by doing the work itself.

Alastair Darling, transport secretary, said: "Network Rail's decision is not an attempt at recreating British Rail.

"Network Rail has had had to deal with the mess that Railtrack left behind. They've been sorting it out and today's decision makes a lot of sense.

"But I still believe that a partnership with both private and public sectors putting in investment, as well as working together, is a better way than going back to the old days, which frankly had more than its fair share of problems."

Tim Collins, shadow transport secretary, said: "When the government renationalised railtrack as Network Rail they said it would save the taxpayer money. In fact costs nearly doubled and are set to rise again.

"We will therefore study carefully and skeptically claims that putting all maintenance contracts back into the public sector will turn out to save the taxpayer money.

"While there have been undoubted problems with the current system the real tests of the changes will be value for money and safety over the longer term."

John Thurso, transport spokesman, said: "Network Rail's recognition that rail maintenance should be one of its core competences is huge progress for the travelling public and has long been advocated by the Liberal Democrats.

"It is crystal clear to passengers that, since privatisation, the fragmentation of maintenance has not delivered the safety and reliability they deserve.

"This is not about who owns the railways, this is about ensuring that there is a direct responsibility for maintenance and the consequent safety for everyone."

Forum Response: Transport and Salaried Staffs Association

Richard Rosser, general secretary of the TSSA, said: "This is great news for passengers and great news for the industry.

"We have always said that rail's 'contractor culture' cost the industry too much money and gave too little control.

"It has taken Network Rail only ten months since taking their first contract in-house, to realise how important it is for them to have complete control over maintenance.

"The next step must be for the Strategic Rail Authority to follow suit and start taking over train operating franchises.

"It is a complete myth that there is competition between companies for these franchises.

"Network Rail found out it could do the work cheaper and better in-house - why doesn't the SRA try this approach?

"Now we have one body owning and maintaining the infrastructure, let's move on to the next stage by having one body operating all the rail services."

Forum Response: Association of Train Operating Companies

George Muir, director general of ATOC, said: "It is no reflection on the maintenance companies, but this is the right thing to do. We must have more reliable maintenance and lower costs - what we have now cannot be allowed to continue.

"We are relying on Network Rail to implement the transition smoothly and deliver the promised benefits.

"On the other hand, track renewals are a fundamentally different task to maintenance, and it is right and proper that Network Rail continues to put these works out to competitive tender.

"The private sector, through the train operators, their suppliers and track renewal companies, will continue to play a central role in delivering for Britain's railway.

"Since the beginning, in 1994, the track maintenance contracts have been difficult to manage.

"It is not an easy interface, and there have been numerous attempts to make it work better. The form of contract has been changed a number of times to try to address issues, from the original RT1A contract, through to the most recent 'NMP contract'.

"There has been a lot of good will on both sides, but it has proved impossible to resolve some fundamental issues - around decision making, supervision, and cost.

"The vagaries of track and signaling condition has made it impossible to codify these matters across a contractual boundary, and the only way forward to deliver consistent quality and reduce aggregate costs seems to be for Network Rail to take direct responsibility for this function.

"Track renewal is a different matter. It is reasonably straightforward to define what is required and for suppliers to price and deliver the work - and a lot of it is done very well. This should continue to be put out to competitive tender, as now.

"The task Network Rail is taking on is daunting, but they have had time to plan it, and it is essential that it is implemented efficiently."