Network Rail


John Redwood
The Business, July 7th 2003

How much is our whole railway network worth? Only £582 million according to the first Annual Report and Accounts of Network Rail, the new owner. It beggars belief that the whole lot has been knocked down to such a small sum. No wonder the company needs Treasury comfort letters and guarantees to carry on its merry way of borrowing and mortgaging the future.

Network Rail now has a trio of experienced businessmen at the helm. Ian McAllister came from Ford, that most commercial of companies. John Armitt the Chief Executive joined from Costains, and Ron Henderson the Finance man worked for Balfour Beatty and BICC before clambouring aboard the calamity express. As soon as they entered the portals of this entirely new concept, a company limited by guarantee with no shareholders and promising to pay no dividends, they entered a politically topsy turvey world where business commonsense flies out of the window.

The plan they are putting forward is doubtless more the plan of ministers and their chosen enforcers, the Strategic Rail Authority. Running a not for profit company that has to answer to the government and the Strategic Rail Authority for every detail of its service is not my idea of a commercial remit. That would explain the triumph of hope over experience, "investing" so much on the back of such a tiny balance sheet in the naive hope that things will get better. This government delights in calling what the rest of us call spending investment, to try to persuade us it is good rather than wasteful.

The cornerstone of their plans for the future is the massive expenditure on the West Coast mainline. In the next five years they say they will spend £6188 million on maintenance and modernisation of this one line. That compares with £1159 million on the whole of the Great Western, £660 million on the Midland Main line and £530 million on Channel tunnel routes. It represents a huge imbalance in the investment programme, is money the taxpayer can scarce afford, and is unlikely to earn any positive return for the investor.

So why are they doing it? Doubtless because they have been told to. Labour MPs living along the line are keen. The SRA has been wooed by the idea that fast trains should be able to go 25 mph faster on that track. To do so requires a complete rebuild, and the attempt to segregate a couple of tracks for more regular high speed running, largely free of freight and stopping trains.

Life is full of compromises on the UK's tired and overburdened railway. People often ask why can't we have a race of super trains like Japan, offering reliable high speed travel between the major cities? The answer is simple. We do not have a track bed capable of offering that service. We have a railway full of gradients, curves, narrow and low bridges and stations. Japan designed long straight dedicated tracks for her bullet trains along a coastal strip of flat land passing through a series of densely populated settlements. Their geography was designed for it. Our Victorian railway is not. To run high speed trains safely and with acceptable maintenance levels you need flat, straight dedicated track.

The UK tries to run a mixed railway on most sections. There are express trains between cities, stopping trains going cross country, commuter trains stopping at every little halt and freight trains with their heavy axle loadings. It makes timetabling a nightmare, and the combination of some high speed trains and some heavy trains adds to the strain on every corner and set of points. Steel wheels slip on steel rails if you accelerate and brake a lot. That's why commuter trains struggle with leaves, rain and the wrong kind of snow.

Some people buy the idea that there was "massive underinvestment" by Railtrack for the short time it was in the private sector., that can be put right by effectively nationalised Network Rail. More cautious enthusiasts believe there was massive underinvestment under nationalisation as well, that will just require longer and more money to put right. If only it were that simple.

It was a relatively new rail that shattered at Hatfield and plunged the railways into an agony of Regulator inspired self-doubt. Putting in new rails everywhere will not prevent rail cracking and breaking. The railway men now think they will need new inspection systems and regular grinding of rails to keep on top of the problem. The replacement of slam door trains by new vehicles doesn't answer all the commuter problems either. They often have doors that do not operate properly, and many new coaches are under camouflage in sidings because there is not enough power on the network to use them!

So what should be done? We need a more business like approach from Network Rail. The SRA should back off or be abandoned. Soviet style planning is unlikely to yield good results. Any sensible business person would start with an analysis of the assets and liabilities. Network Rail has some great assets - the routes into the hearts of all our major cities, and the land that goes with the prime site stations. Network Rail needs to decide how it can make maximum use of each route for public transport, regardless of technology. It may well conclude that running mixed railways using conventional steel on steel is not the best way.

The whole should be worth so much more than £582 million net. The lines into and out of London should primarily be a commuter railway. We need a technology which allows many more trains or buses an hour along dedicated routes. The modern commuter railway is left blasting sticky sand onto the track in the hope that steel wheels will then adhere. Surely we can think of something better? Why not use some rubber wheels, or have combi vehicles that could drive to the rail head on rubbers and then use steel if the conditions are good? Why not build a maglev concrete track for a fast London to Scotland route dedicated to speed and comfort? In some cases conversion to roads may be the best answer to maximise through put and revenue running dedicated bus route services. Changing traction from diesel to electricity is often not a productive investment. The cheese paring at the Treasury means the overhead lines are often coming down on the East Coast, spoiling the faster running speeds.

We need new thinking and new technology. Throwing billions down the same drain is not going to help. Meanwhile all the SRA comes up with is the idea of cancelling some trains so the rest can run on time. The logic of their position is to cancel the lot, so then none will be late!
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