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Advantage Armitt

RAIL

Five years since taking the helm at Network Rail, John Armitt has turned the troubled infrastructure operator around. But how far will he go to satisfy Government and passengers? He talks maintenance and renewals with Emma Crates

THE PROBLEM with turning around a facility that has been written off by the media and politicians as a national disgrace is that people start wanting to use it again. This is the challenge now facing Network Rail chief executive John Armitt.

When he joined the beleaguered predecessor Railtrack in 2001, it was reeling from the aftermath of the Hatfield crash and had just been put into administration.

Nearly five years on the railway is back to preHatfield performance, typically running at 90 per cent punctuality on a day-to-day basis.

One of Mr Armitt's biggest achievements in the t ime he has been with the network operator is, he believes, achieving a better level of funding for 2004-09.

'It has given the railway the chance to get back on its feet after decades of underinvestment, ' he says.

But as a result, passenger numbers are up and the operator is forecasting a 30 per cent growth in passengers and a similar expansion of freight over the next 10 years.

Now Mr Armitt's challenge is to steer a steady course between the rising expectations of the public and his extensive and very necessary programme of maintenance, upgrades and renewals, which will impact on timetables.

The goal of achieving a world class 'seven day railway' (as railwaymen like to refer to a system that caters for the public need every day of the week) is what has informed, and will continue to drive, his decision making on how best to use contractors.

He argues that taking maintenance in-house, which the operator decided to do in 2003, has been of 'enormous importance' in achieving stability in the industry.

'Privatising maintenance was one of the steps too far in the break-up of the industry. It encouraged Railtrack to be an owner of assets, but not in a real sense. And it resulted in a loss of corporate knowledge in the very thing that it owned, ' he says.

Reversing that has allowed the operator to regain control, understanding and knowledge, as well as saving money. 'It provides a sort of bedrock to the business in parallel with the signalling and operational control side.'

The big question that has been hanging over contractors ever since is whether Mr Armitt intends to do the same with renewals work.

As the approachable type of chief executive, Mr Armitt is well used to being asked this question, but his usually amiable countenance looks a touch jaded as he says: 'I get almost fed up with saying it. I say it every time I meet the contractors. We have a very challenging efficiency target. In the first two years of this cont rol per iod we've achieved 11 per cent efficiency in track renewals. The target is 31 per cent.'

Elsewhere in the business, 20 per cent efficiencies have been achieved. While trackwork has been slower to improve, the hopes are that the latter half of the fiveyear programme will see efficiencies speed up.

There is, he concedes, a case for keeping renewals in the private sector - while maintenance is a 24-hour operat ion, renewals is a ser ies of separate act ivit ies, often carried out at weekends or at night.

'Very often they're being planned weeks or months in advance, which is something the contractors are used to doing in the rest of their business.'

There have been success stories. The Levens Viaduct in Cumbria was originally planned for a 32week closu re. But cont ractor Car illion has delivered the project successfully in just 16 weeks. Mr A rm it t will be looking to other contractors to produce similar results.

'I've constantly said to cont ractors, if you can deliver what we want, we'll continue to use you. But if we're not getting the right level of engagement, we might as well do it ourselves.'

Contractors who innovate with pre-assembly techniques are more likely to win the ear of Mr Armitt.

He is keen to push the boundar ies as far as possible.

To that end Network Rail is also looking at prefabrication possibilities across a range of projects and is working on modular station design, as well as standardising products such as footbr idges.

Asking contractors to reduce a 36-hour possession to 24 hours does not, he argues, inspire people to come up with the most innovative approaches.

'But if you say that you want to change the 36-hour possession to 12 hours, people get more excited and radical and willing to accept the challenge.'

For the client's part, Mr Armitt is also looking at a similarly revolutionary overhaul of procedure: how Network Rail can reduce the time it takes to hand over the infrastructure to contractors for possession work from 45 minutes to just five minutes.

While this has not yet been achieved, Mr Armitt says it is possible without compromising safety. The operator is studying best practice in Switzerland, Canada and Holland.

Network Rail is also investigating the possibility of single-line working - a practice adopted in France - which involves keeping adjacent tracks active while work is going on. 'We and some of our contractors have invested a lot in high output equipment, so we want to get the benefits from it, ' he says.

Improving performance relies, of course, on trust and co-operation between the client and its supply chain. Mr Armitt is keen to move away from adversarial practices such as man marking - employing people to check up on his cont ractors' activities - but says he may have to if there are too many slip-ups.

'I've got to have faith that the contractor's systems are in place. We have had things left on track, which get struck by the first train coming through. It's very embarrassing to us, and potentially very dangerous.'

Things are looking rosy on the investment front.

Network Rail is, says Mr Armitt, 'pretty well on target' for its planned spend for signalling, renewals and switch and crossings.

The next period - 2009-14 - is looking even more hopeful, as the client recently asked the Office of Rail Regulation for an extra £8 billion, in addition to the already requested £20 billion, to enhance the rail network's capacity through a series of major projects, £3 billion of which is accounted for by the Thameslink scheme. While the Government's decision on the funding will not be known until later next year, the operator has already unveiled plans to raise funds through granting air rights for buildings over tracks as par t of the redevelopment of some of London's major stations. This strategy could add an extra £4 billion to Network Rail's development pot.

But as Mr Armitt likes to rem ind his team, railways are not there for the benefit of engineers, but for passengers.

In aspiring to the Holy Grail of the seven-day railway, even his tough goal of achieving 31 per cent efficiency on renewals works may have to shift.

'At the end of the day I might not get my full 31 per cent efficiency. I may have to give up some of that because the revenue opportunity in running trains is greater than the cost savings I can make through longer possessions.'

It is a subject receiving a lot of attention from parties outside Network Rail such as train operators, the rail regulator and the Government.

'Clearly contractors are going to be more sucked into this debate, ' he says.

There is no doubt that they will want to contribute.

Taking on the risk?

WHILE another mega-client - airport operator BAA - is shouldering all the risk on the mammoth Heathrow Terminal 5 project with everyone working under a single client-led team, Mr Armitt has no plans to do the same.

Network Rail has used integrated teams on big projects such as the West Coast Main Line. 'We've largely disbanded these because they weren't giving us value for money, ' he says. Instead, the operator is focusing increasingly on getting the complete design of a project finalised before letting it to the contractor in the conventional manner.

'We tend not to have the same time constraints [as the T5 project].

We've got such a flow of work coming through we can spend the time getting the project right before we put it out to contract.

'We have, in many instances, tried to take more and more of the risks, which we can price off more cheaply to ourselves. But nobody has yet achieved a satisfactory single project insurance. The Association of Consulting Engineers has been working on this for three years with different clients. At the end of the day [the accident at] Gerrards Cross demonstrates very clearly the risk associated with projects and where that risk should sit.'