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Boom and bust rail cycles can finally be eradicated

Darren Caplan

Last week parliament’s transport select committee published a report following its inquiry into rail infrastructure investment, with two key outputs for rail suppliers.

The inquiry was wide in scope, covering devolution and regional spending, the shift of enhancements out of the five yearly Control Period funding cycle, and the role of the Office of Rail and Road (ORR) as regulator. However, for companies involved in maintaining, building and enhancing the rail network, two recommendations will stand out.

The first is the committee’s call to tackle boom and bust in the sector. Any company involved in the provision of rail infrastructure will be aware of this issue – in every Control Period since privatisation, rail suppliers have seen inconsistency in funding, meaning rail suppliers have to increase their capacity at the start of the funding cycle only to see a sharp drop-off in workload near the end.

This leads to a whole host of problems, including job losses in the supply sector, reduced investment and the risk of rail companies – particularly SMEs – being unable to survive. It is also an inefficient way to run a railway, driving up the cost of running the rail network by as much as 30 per cent.

Systemic issue

The Railway Industry Association (RIA) flagged this as a serious issue last summer as we headed towards the end of CP5, working with Network Rail and the government to unlock £200m so that the industry could avoid a funding cliff-edge. While this additional funding was very welcome, it did not deal with the systemic issue of boom-and-bust cycles that continue to plague the industry.

In January the RIA urged the transport select committee to help it get the Department for Transport, ORR, Network Rail and suppliers round a table to solve this problem. The committee’s recommendation to do so vindicates the concerns suppliers have been voicing; it is imperative we now get together to find a solution.

Electrification challenge

The second recommendation that catches the eye relates to electrification. In July last year, the government cancelled several electrification schemes it deemed no longer cost-effective. Nevertheless, on busy lines electrification remains the best form of traction – it is more cost-effective over the medium and long term, more environmentally friendly and creates less wear and tear on the track.

The RIA has been assessing how costs can be reduced through the Electrification Cost Challenge, and believe we can get costs down to 2009 levels. The committee backed this last week, stating: “The department and Network Rail should engage with the RIA’s Electrification Cost Challenge and together produce a report on cost-effective electrification within 12 months.”

“Electrification, along with bi-mode, battery, hydrogen and other alternative fuel sources, must all be on the table as solutions to decarbonise”

This is particularly important in the context of the government’s ambition to decarbonise the rail network by 2040. Electrification, along with bi-mode, battery, hydrogen and other alternative fuel sources for train traction, must all be on the table as solutions to decarbonise.

With the committee’s recommendations published, we look forward to working with the government to end boom-and-bust cycles and ensure it maintains an open mind about electrification.

Darren Caplan is chief executive of the Railway Industry Association

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