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Office of Rail and Road finds Network Rail in breach of Control Period 5 delivery licence

Network Rail has breached its licence in delivering its Control Period 5 delivery programme, the country’s chief rail regulator has said.

Following an investigation, the Office of Rail and Road found a “series of issues relating to the delivery of major projects” for its CP5 programme through to 2019.

It added that Network Rail was now “taking steps towards addressing gaps in its capability and planning”.

In August, Construction News reported that the ORR was looking into the possibility that Network Rail could have breached condition one of the Network Rail licence.

Condition one of the Network Rail licence includes a commitment to the operation, maintenance, renewal and enhancement of the rail network.

In a letter to the operator, ORR director of planning and performance Alan Price wrote that the regulator’s “preliminary view” was that Network Rail “may not have done, and is not doing, everything reasonably practicable to comply with condition one of its network licence in relation to the delivery of its enhancements programme”.

He also said Network Rail had missed 30 of its 84 project milestones and that “systemic weaknesses” were found in the organisation’s project development on CP5.

Following the letter, an ORR spokesman told Construction News the regulator had given Network Rail until 1 September to provide additional information in relation to its findings.

After receiving that information, the ORR has confirmed that Network Rail was in breach of its licence and has now called on Network Rail to demonstrate how it will “adopt good practices”.

An ORR spokesman said: “ORR reported in June 2015 that Network Rail had not met a number of its enhancements programme delivery targets with some projects facing delays.

“Following an investigation into causes for the delays and missed project milestones, the regulator found a series of issues relating to Network Rail’s capability to deliver the major projects programme by 2019. 

“Network Rail is taking steps towards addressing gaps in its capability and planning.

“The company must demonstrate how it will adopt good practice across its business in delivery of enhancements across the network, and how it will robustly implement these to deliver for its customers and taxpayers.”

Network Rail’s £38.5bn CP5 enhancement programme includes the electrification of a number of major rail lines including the Great Western Main Line, the Midland Main Line and the TransPennine Route.

The rail operator has been plagued by project delays, with June seeing the “pausing” of electrification work on the Midland Main Line and the TransPennine Route.

Earlier this week, transport secretary Patrick McLoughlin announced the “unpausing” of work on these lines but with the completion dates for both projects put back four years.

In response to the licence breach, Network Rail managing director for infrastructure projects Francis Paonessa said: “Since 2009, Network Rail has successfully delivered over 5,000 projects worth more than £15bn.

“The projects set before us for our current five-year funding period to 2019 were bigger and more complex than ever and required a step-change in delivery – both for the company and its supply chain.

“Despite this challenge, over three-quarters of our regulatory project milestones have been delivered to time or within weeks of target.”

Mr Paonessa added that Network Rail “must do better” and had set up a board-led task force to strengthen its major project delivery.

He said the task force had produced a detailed improvement plan that was already under way and making “good progress”.

A Department for Transport spokesman said: “It is right that the regulator should hold Network Rail to account and ensure that it delivers for its customers and taxpayers.

“In addition to the ORR’s investigation, Dame Colette Bowe will report back on the lessons learned from Network Rail’s enhancements programme later in the autumn.

“Sir Peter Hendy will also propose an enhancements programme which is deliverable and builds on the decision this week to resume work on Transpennine and Midland Mainline electrification.”

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