Network Rail’s enhancements

We hold Network Rail to account for delivery of its enhancement projects (large scale projects delivering new infrastructure) to its customers and funders. We do this by monitoring and publicly reporting on the delivery of projects and improvements in its capability.

We protect the interests of Network Rail’s customers and stakeholders by making sure they have the opportunity to comment on the impact of changes to Network Rail’s plans.

We provide guidance on the Investment Framework to inform  third parties thinking of investing in the railway approve  template contracts and provide advice where required.

What are the enhancement projects Network Rail is committed to deliver?

Network Rail’s license requires them to publish a delivery plan that sets out its obligations for enhancement projects.  This allows train operators to plan their businesses and funders to plan their finances with a reasonable degree of assurance.

For control period 5 (CP5 from 2014-2019), any projects to enhance the rail network are listed in Network Rail’s Enhancement Delivery Plan.

If Network Rail need to make changes to the Enhancements Delivery Plan, for example if a delivery milestone has to be delayed, Network Rail must agree it with their funders and submit a formal Change Control request. ORR reviews these Change Controls to make sure that all the affected stakeholders (such as train companies and local councils) have been consulted and that Network Rail are addressing their concerns.

As part of this process, ORR provides Network Rail with a quarterly letter, outlining our decisions on each of the Change Controls:

How is Network Rail performing on delivering enhancement projects?

We report on Network Rail’s performance in delivering enhancement projects every 6 months. We also publish a report that lists the project milestones for each 6 month period showing which milestones were achieved, missed or revised.

In addition, we sometimes use the independent reporter to complete a detailed review of specific projects or delivery issues. Recent reviews have included Network Rail’s implementation of the Enhancements Improvement Plan, delivery of Stirling-Dunblane-Alloa project and Edinburgh Glasgow Improvement Programme’s Target Cost. The reviews by independent reporters are available.

We found Network Rail in breach of its licence in October 2015 regarding its planning and delivery of its enhancements programme.  Since 2015, Network Rail has been working on many improvements to its capability to manage enhancements, including the Enhancements Improvement Programme (EIP).

We report on Network Rail’s progress with improving its capability in our Monitor. We have also commissioned the independent reporter to complete reviews of some areas where Network Rail has been improving its capability, including the Enhancements Improvement Programme and its management of complex programmes.

How is Network Rail incentivised for efficiencies in Scotland enhancements?

It's ORR's job to make sure that Network Rail’s  costs are justified, so that future grants from governments and access charges from train operators are good value.

Key to this is incentivising the company to continuously look for ways to eliminate unnecessary costs as projects are developed and delivered. We normally set this framework at a periodic review but last time (PR13) many projects were at such an early stage of development we felt there was too much risk to taxpayers and customers; therefore we developed the Enhancements Cost Adjustment Mechanism (ECAM). ECAM is used for all enhancements projects in Scotland but has not been applied to projects in England & Wales, following the Hendy review and agreement with DfT.

We welcome any further evidence that would improve our decisions on enhancements projects. Please send any such evidence to contact.cct@orr.gsi.gov.uk, indicating if you wish all or part of it to remain confidential to ORR and explain why.