Hendy: NR Board should have challenged CP5 settlement
Network Rail Chairman Sir Peter Hendy used his George Bradshaw Address on February 27 to criticise the Control Period 5 (CP5) five-year funding settlement, and to lay out plans for what is expected of NR’s next chief executive.
Talking to invited guests from the rail industry, Hendy (pictured) described the CP5 settlement as featuring “unrealistic economies based on, frankly, bad and now discredited international comparisons. The worst thing of all was the CP5 enhancement programme.”
Projects in CP5 (2014-19) included London Bridge and various electrification schemes. Hendy said: “I think it resembled a list - uncosted and not ranked by business case - of aspirations for railway enhancements that couldn’t be paid for (except with unlimited debt), couldn’t be carried out (because of lack of definition and capacity), and in one glorious case (as I discovered during my review) had no supporters whatsoever (the ‘Electric Spine’).”
He added: “I am sorry the Board of Network Rail didn’t challenge the CP5 settlement. If I had been there I certainly would have done. So, Network Rail started major projects like Great Western without knowing the definition, full cost and time it would take, largely because it could borrow as much money as it needed to finish the job.”
Hendy said that the replacement for outgoing NR Chief Executive Mark Carne must “deliver the first year of CP6 successfully as devolved, independently regulated routes”.
He said failure to spend the money wisely, complete the work bank and deliver the forecast operational performance on a route basis would be a catastrophe for the routes, for the individuals who run them, and for the credibility of NR’s CP6 Strategic Business Plan.
He said that whoever replaces Carne must “make both the growing alignment of the performance metrics of the routes with the TOCs and the new Supervisory Boards work”, adding: “We have to show that the meticulous planning and costing of projects, and the politically difficult delays that that process causes, provide better project outcomes in the future
“Let’s decide what the best things for the network are, who might fund them (including third parties), work out costs, timetable and plans - then do them.”