ORR seeks reassurances from HS1 over late renewals projects
HS1 Ltd has rejected concerns from the Office of Rail and Road over how the company is managing its asset renewals.
In the regulator’s annual report (the latest in its series of ‘endof-term reports’ on the railways, RAIL 963), it calls for action over HS1’s ability to deliver its track and infrastructure renewals over its control period from April 1 2020 to March 31 2025 (CP3).
The ORR report on HS1’s operational and financial performance for the year to March 31 shows that delays due to incidents was “well below minimum required standards”. It also says it is “concerned” over HS1’s “capability to manage changes to its plan”.
In a statement, HS1 responded: “We welcome the ORR’s report and their findings, which help underpin our continued commitment to the outstanding performance of the line.
“We are particularly pleased to see the ORR recognise the high performance of train services and the continued progress HS1 has made on recommendations to continue these improvements.
“We will continue our work to deliver these improvements, to make sure the HS1 line provides the highest possible service for passengers.”
The operator of the high-speed line from the Channel Tunnel to St Pancras (used mainly by the 29 sixcoach 140mph Class 395 ‘Javelin’ services from North Kent/Ashford to St Pancras, run by Southeastern) has a 30-year concession from the Department for Transport to run the 68-mile line until 2040.
HS1 is owned by a consortium comprising Canada-based Borealis Infrastructure and Ontario Teachers’ Pension Plan. The consortium is paying the DfT £2.1 billion during the 30 years to operate the line.
Although the total number of trains using HS1 increased by 6% during the year to 51,200 (48,200 in 2020-21), it was still one-third below the 72,700 number of pre-pandemic trains.
At 45,700, Southeastern’s services are marginally higher than the 2020-21 figure, while the number of freight trains declined by 4% from 438 to 421. Eurostar ran 5,500 trains (2,900 in 202021), substantially below its preCOVID 17,600 trains in 2019-20.
ORR says HS1 has failed to provide enough evidence that it has undertaken adequate assurance on Network Rail (High Speed)’s decision to defer several renewal projects.
In addition, ORR says it has not
been provided with clear evidence to assure it of the capability of Network Rail (High Speed) to accurately assess the current condition of its asset portfolio and to deliver the asset renewal programme.
It expects HS1 Ltd to undertake a more rigorous assurance regime on Network Rail (High Speed)’s project delivery until the renewal shortfall is recovered.
In its report, the regulator says that HS1 reported £9.97 million as the total cost of renewal work done. But a £2.07m shortfall in the delivery of the CP2 projects and a £3.51m shortfall in the delivery of CP3 projects “comes on top of poor performance in renewals delivery the previous year”, when there were underspends on investment of £1.98m on CP2 delivery and £5.04m on CP3 delivery. In total, the underspend is £12.6m.
“There has been no sign of recovery by HS1 in terms of the previous shortfall on investment in renewals,” said ORR Chief Executive John Larkinson.
“This means there is now a two-year compounded renewals shortfall of £12.6m; planned infrastructure investment which has not been made.
“In addition to a rigorous assurance regime, HS1 Ltd should request a recovery plan from Network Rail (High Speed) and implement additional monitoring against the recovery plan.”
HS1 responded that there are “clear and sensible reasons” for the level of mitigations. It told RAIL that it is “fully aware” of the situation regarding renewals, and that it has been working with its supply chain over the last six months to manage the remaining portfolio of projects, after the impact of COVID affecting resource and materials shortages.
It added that because HS1 manages the asset for longer, it has gained a “stronger understanding” of the maintenance of assets and their renewal.
As a result, it is undertaking a “smarter attitude” to renewals, away from forecast renewal dates set out at the beginning of the control period.
This means that HS1 can more effectively determine when an asset needs renewal, and if it needs to be renewed earlier than the suggested timeframe or used for longer given less-than-expected deterioration.