Network Rail

Network Rail is the trade name used by Network Rail Ltd and its various subsidiary companies. The most prominent subsidiary is Network Rail Infrastructure Ltd (previously Railtrack plc) which is the owner and operator of most of the rail infrastructure in Great Britain (England, Scotland and Wales). It is not responsible for railway infrastructure in Northern Ireland or for the majority of track used by London Underground.

Network Rail Ltd is a statutory corporation created as a "not for dividend" private company limited by guarantee; Network Rail Infrastructure Ltd was reported in the 2010 annual company report as 100%-owned by Network Rail Ltd. Network Rail Ltd. has no shareholders thus is not owned by anyone but it is subject to various official requirements and directions. Currently the company applies its income to its own purposes (including some donations to charities etc. ). The lack of a legal owner makes it liable (as happened with the pre-privatisation Trustee Savings Bank) to any future statute taking it into government ownership and its status as a statutory corporation enables the government to make changes to the company despite not being the legal owner.

Network Rail's main customers are the separate and mostly private-sector train operating companies (TOCs), responsible for passenger transport, and freight operating companies (FOCs), who provide train services on the infrastructure that the company owns and maintains. Network Rail does not itself run passenger or freight services. Ultimately both Network Rail and the train operating companies have the shared responsibility of delivering train services to the travelling public.

History
Britain's railway system was built by private companies, but it was nationalised by the Transport Act 1947 and run by British Railways until re-privatisation in the 1990s. Infrastructure and passenger and freight services were separated at that time. Between 1994 and 2002 the infrastructure was owned and operated by Railtrack.

The Hatfield train crash on 17 October 2000 was a defining moment in the collapse of Railtrack. The immediate major repairs undertaken across the whole British rail network were estimated to have cost in the order of £580 million and Railtrack had no idea how many more 'Hatfields' were waiting to happen because it had lost considerable in-house engineering skill following the sale or closure of many of the engineering and maintenance functions of British Rail to external companies; nor did the company have any way of assessing the consequence of the speed restrictions it was ordering, which all but brought the railway network to a standstill. The costs of modernising the West Coast Main Line were also spiralling. In 2001, Railtrack announced that, despite making a pre-tax profits before exceptional expenses of £199m, the £733m of costs and compensation paid out over the Hatfield crash had plunged Railtrack from profit into a loss of £534m, and it approached the government for funding, which it then used to pay a £137m dividend to its shareholders in May 2001.

Network Rail Ltd. took over control by buying Railtrack plc, which was in "railway administration", from Railtrack Group plc for £500 million; Railtrack plc was then renamed and reconstituted as Network Rail Infrastructure Ltd. The purchase was completed on 3 October 2002. The former company had thus never ceased to exist but continued under another name: for this reason Network Rail Infrastructure Ltd was the defendant in later prosecutions in respect of events which had occurred in the days of Railtrack.

Following an initial period in which Network Rail established itself and demonstrated its competence in addressing the principal challenges of improving asset condition, reducing unit costs and tackling delay, the Government's Rail Review in 2004 White Paper said that Network Rail should be given responsibility for whole-industry performance reporting, timetable development, specification of small and medium network enhancements, and the delivery of route-specific utilisation strategies (RUS). Some of these are functions which Network Rail already had; others – such as the obligation to devise route utilisation strategies – were transferred to Network Rail from the Strategic Rail Authority, a non-departmental public body, part of the UK government. The SRA was subsequently abolished.

The company moved its headquarters to Kings Place, 90 York Way, from 40 Melton Street, Euston, on 26 August 2008. On 3 October 2008, Sir Ian McAllister announced that he would not stand for re-election as chairman of Network Rail. He had held the position for six years. He noted that as Network Rail moved to a "new phase in its development" it was appropriate for a new chairman to lead it there.

Many track safety initiatives have been introduced in the time Network Rail has been responsible for this area. The latest, announced in December 2008, known as "All Orange", states that all track personnel must not only wear orange hi-vis waistcoats or jackets, but must also wear orange hi-vis trousers at all times when working on or near the track.

This new safety ruling came into force on 1 January 2009 for maintenance and property workers and on 1 April 2009 for infrastructure and investment sites.

In 2011 the company began the process of reorganising its operational structure into nine semi-autonomous regional entities, each with their own managing director; the first two units to be created were Scotland and Wessex regions. The re-organisation has been interpreted as a move back towards vertical integration of track and train operations.

Responsibilities


Network Rail owns the infrastructure, including the railway tracks, signals, overhead wires, tunnels, bridges, level crossings and most stations, but not the passenger or commercial freight rolling stock.

Although it owns over 2,500 railway stations, it manages only 17 of the biggest and busiest of them, all the other stations being managed by one or other of the various train operating companies (TOCs). Network Rail had a 15-year lease on Square One in Manchester with 800 staff in one of Manchester's largest refurbished office spaces.

Network Rail should not be confused with 'National Rail'. National Rail is not an organisation, but merely a brand, used to explain and promote a Great-Britain-wide network of passenger railway services. The majority of Network Rail lines also carry freight traffic; some lines are freight only. A few lines that carry passenger traffic are not part of the National Rail network (for example High Speed 1, Heathrow Express, Tyne and Wear Metro (The Tyne and Wear Metro uses Network Rail track between Pelaw and Sunderland and is responsible for that) and the London Underground). Conversely, a few National Rail services operate over track that is not part of the Network Rail network (for example where they run on London Underground track). For example, Chiltern Railways services run on track owned by London Underground between Harrow-on-the-Hill and Amersham.

The current Chairman is Richard Parry-Jones, and David Higgins is currently appointed as the Chief Executive.

Infrastructure
Network Rail covers 20,000 miles of track, and 40,000 bridges and tunnels.

In October 2003 Network Rail announced that it would take over all infrastructure maintenance work from private contractors, following concerns about the quality of work carried out by certain private firms, and spiralling costs.

February 2004 saw the opening of an operations centre at Waterloo station in London, operated jointly by Network Rail and the train operating company South West Trains. This was the first full collaboration of its kind since privatisation, and it is regarded as a model for other areas of the network, with a further six integrated Network Rail + TOC Control Centres having opened since then, at Blackfriars, Croydon (Leading Control for First Capital Connect), Swindon, Birmingham New Street, Glasgow and, most recently, Liverpool Street and South Wales based in Cardiff Canton.

Track renewal, the ongoing modernisation of the railway network by replacing track and signalling, continues to be carried out by private engineering firms under contract. The biggest renewals project is the multi-billion-pound upgrade of the London – Glasgow West Coast Main Line, which was completed in 2008.



Network Rail initially sub-contracted much of the work and the site to private Infrastructure Maintenance Companies such as Carillion and First Engineering. Other sub-contractors are used on site for specialist work or additional labour. These include Prima Services Group, Sky Blue, Balfour Beatty, Laboursite, BCL, Atkins (Atkins Rail) and McGinleys.

Since 2003 Network Rail has been building up significant in-house engineering skills, including funding of apprenticeship and foundation degree schemes. Network Rail reports significant savings resulting from the initial transfers of work away from contracting companies. Additional contracts were taken back by Network Rail after the serious accident at Potters Bar and other accidents at Rotherham and King's Cross led Jarvis to pull out of the track repair business. Shortly after this, and due to other failures by maintenance companies, Network Rail took control of many more maintenance duties. Telecomms maintenance came full circle in April 2009 with the bringing in house of the staff of Thales Telecom Services Ltd (formerly British Rail Telecommunications (BRT)). In 2006, Network Rail made public a high-tech plan to combat the effects of slippery rail. This plan involves the use of satellites for tracking trouble areas, water-jetting trains and crews using railhead scrubbers, sand sticks and a substance called Natrusolve, which dissolves leaf mulch.

All workers working on, near or trackside have to undergo a Personal Track Safety assessment (re-assessed every two years) Network Rail workers undergo an assessment every year as part of AITL (Assessment in the Line). The AITL requires each worker to go through questions on a computer based program on all the competencies held.

In September 2007 it was announced that the number of track renewal contractors will be reduced to four from the current six. These are now Amey/SECO, Balfour Beatty, Babcock First Engineering and Jarvis PLC. Jarvis PLC has since gone into administration, with the bulk of its work commitments being picked up by Babcock.

Stations
Network Rail owns more than 2,500 railway stations, divided into six categories. Management and operation of most of them is carried out mostly by the principal train operating company serving that station; however, in a few cases the train operating company does not serve the station. For example, Hinckley is served by CrossCountry, but it is managed by East Midlands Trains. Network Rail manages and operates 17 of the largest and busiest stations directly, The stations Network Rail operate are:


 * Ernest New Street
 * Edinburgh Waverley
 * Glasgow Central (High Level)
 * Leeds
 * Liverpool Lime Street
 * London Bridge
 * London Cannon Street
 * Charing Cross
 * London Euston


 * London Fenchurch Street
 * London King's Cross
 * London Liverpool Street
 * London Paddington
 * London St Pancras
 * London Victoria
 * London Waterloo
 * Reading (from 2015)
 * Manchester Piccadilly

Glasgow Central, Liverpool Lime Street and London St Pancras stations are divided into high and low level stations – the high level stations are all termini used primarily by the main inter-city services to those stations. The low level stations are through routes on local commuter networks that are largely separate from other routes to the main station; these stations/platforms are not managed by Network Rail, but instead the rail operator that primarily uses them.

Network Rail operated Gatwick Airport station until January 2012, when it was transferred to Southern. Network Rail will also take over operatorship of when the station redevelopment is complete in 2015.

Training facilities
Network Rail has several training and development sites around Britain. These include sites in Newcastle, Peterborough, Derby, Leeds, Walsall and Larbert which provide refresher courses, and train staff in new equipment. Advanced Apprentice Scheme trainees are trained at HMS Sultan in Gosport within the whole the first year and over seven 2-week periods or five 3-week periods (throughout their second and third year) of their apprenticeship, using a combination of Royal Navy facilities and a specially installed training centre. All courses are taught by VT Flagship (part of Babcock International) in the first year but apprentices are trained by Network Rail staff in the second and third years. Network Rail bought a residential centre from Cable and Wireless in the Westwood Business Centre near Coventry for leadership development. The company and other industry partners such as VolkerRail and Balfour Beatty, also operate a Foundation Degree in conjunction with Sheffield Hallam University.

In 2008, Network Rail piloted its first qualification in "track engineering". It has been given permission to develop courses equivalent to GCSE and A-levels.

Telecoms assets
Network Rail operates various essential telecommunication circuits for signalling and electrification control systems, train radio systems, lineside communications, level crossing CCTV, station information and security systems as well as more general IT and business telephony needs. The fixed bearer network infrastructure comprises transmission systems and telephone exchanges linked by a fibre optic and copper cable network that is located mainly within trackside troughing routes on the former British Rail Telecommunications network. (It is the largest private telecoms network in the UK.)

Network Rail operates several analogue radio networks that support mobile communication applications for drivers and lineside workers which consist of base stations, antenna systems and control equipment. The National Radio Network (NRN) was developed specifically for the operational railway; it provides radio coverage for 98% of the rail network through 500 base stations and 21 radio exchanges. The Radio Electronic Token Block RETB system is based on similar technology as the NRN and ORN but provides data communication for signalling token exchange as well as voice communication.

Fixed communication at trackside is provided by telephone. These are primarily provided for signallers’ to communicate with train-crew, via telephones mounted on signal-posts, and with the public through telephones located at level crossings. GAI-Tronics provides many of the telephones sited on trackside and at level crossings. They also provide Public Access Help Points on platforms and stations to provide passengers with easy access to Information and Emergency control centres.

GSM-R radio systems are being introduced across Europe under EU legislation for interoperability. In the UK, Network Rail have established a stakeholders board with cross industry representation to drive the UK implementation of GSM-R to replace the National Radio Network (NRN) and Cab Secure Radio (CSR) systems currently in use.

Rolling stock
Network Rail operates a large variety of DMUs, locomotives and rolling stock to perform safety checks and maintenance (this fleet is not be confused with the combined rolling stock assets of ATOC members who work in combination as National Rail). As well as the multiple units and locomotives detailed below, Network Rail own and operate a large stock of rolling stock for particular testing duties and track maintenance. Network Rail also hire freight locomotives from DB Schenker and Freightliner among others to operate engineers trains at weekends. DRS provide a number of locomotives to power test trains around the network when Network Rail locomotives are unavailable or busy elsewhere. Drivers of Network Rail rolling stock are hired from DB Schenker.

The GRIP process
For investment projects, as opposed to routine maintenance, Network Rail has developed an eight-stage process designed to minimise and mitigate risks. This is known as the Governance for Railway Investment Projects (GRIP), previously known as “Guide to Rail Investment Projects”. The stages are as follows:
 * 1) output definition;
 * 2) pre-feasibility;
 * 3) option selection;
 * 4) single option development;
 * 5) detailed design;
 * 6) construction, test and commission;
 * 7) scheme hand back;
 * 8) project close out.

Each stage delivers an agreed set of outputs to defined quality criteria.

Control periods
For financial and other planning purposes, Network Rail works within 5-year "Control Periods", each one beginning on 1 April and ending on 31 March to coincide with the financial reporting year. These periods were inherited from Railtrack, so that the earlier ones are retrospective, and not necessarily of 5 years duration. They are as follows:
 * Control Period 1 (CP1): 1996–2001
 * Control Period 2 (CP2): 2001–2004
 * Control Period 3 (CP3): 2004–2009
 * Control Period 4 (CP4): 2009–2014
 * Control Period 5 (CP5): 2014–2019
 * Control Period 6 (CP6): 2019–2024
 * Control Period 7 (CP7): 2024–2029
 * Control Period 8 (CP8): 2029–2034

The Secretary of State for Transport regularly issues a High-Level Output Specification (HLOS) indicating what work the Government wishes to be undertaken during a given Control Period.

Route plans
Network Rail regularly publishes a Strategic Business Plan detailing their policies, processes and plans, as well as financial expenditure and other data. The most recent complete business plan was published in January 2013. Within these plans the rail network is divided into 26 Strategic Routes, with a Route Plan for each being published annually. The Business Plan and the Route plans were updated in 2008 and the Route plans again in 2009.

Each Route Plan covers a number of railway lines usually defined by geographical area and each route is further subdivided into Strategic Route Sections (SRS) and given an SRS number and name. The plans also detail the geography of routes, stations, major junctions, capacity constraints and other issues and provide data on freight gauge, electrification, linespeed, number of tracks, capacity and other information. The plans also detail the expected future demand and development of each route, their predicted expenditure and their maintenance and investment requirements.

The Route Plans and respective areas are organised as in the table below.

Electricity
Network Rail opened the world's largest solar-powered bridge at Blackfriars Bridge across the River Thames in January 2014. The roof of the bridge has been covered with 4,400 photovoltaic panels, providing up to half of the energy for London Blackfriars station.

Formal governance structure
The company is accountable to a body of members through its corporate constitution, to its commercial train operator customers through its contracts with them (the contracts are subject to regulatory oversight), and to the public interest through the statutory powers of the Office of Rail Regulation.

Since Network Rail does not have shareholders, its members hold the Board of Directors to account for their management of the business. Members are appointed by an independent panel and serve a three-year term. They have a number of statutory rights and duties which include attending annual general meetings, receiving the Annual Report and Accounts, and approving the appointment or re-appointment of Network Rail’s directors. Members have a duty to act in the best interests of the company without personal bias. They receive no payments other than travel expenses.

Members have clearly defined and limited powers; they do not run the company. Setting the strategic direction and the day-to-day management of Network Rail is the responsibility of the company’s Board of Directors. That direction must be consistent with the regulatory jurisdiction of the Office of Rail Regulation, and with the requirements of its contracts. The Office of Rail Regulation in turn operates within the overall transport policy set by the UK Department for Transport and the Scottish Government, including as to what the Government wants the railway industry to achieve and how much money the Government is prepared to put into the industry. This means that the degree of Government influence and control over the company is higher than it was before these enlargements of the powers and role of the Government were introduced by the Railways Act 2005.

At any one time there are around 100 members in total, drawn from a wide range of industry partners and members of the public. There are two general categories of membership, industry members comprising any organisation holding a licence to operate on the railway or preferred bidder for a railway franchise, and public members who are drawn from the wider stakeholder community.

Monitoring Network Rail's performance
The Office of Rail Regulation monitors Network Rail's performance on a continuous basis against targets established by the regulatory authority in the most recent access charges review (2003), against obligations in the company's network licence and against forecasts in its own business plan. If performance is poor,the company will face criticism and possible enforcement action from its commercial customers (under their contracts) and from the Office of Rail Regulation (enforcing the company's network licence). It may also be criticised by its members in general meeting.

In the end of year report 2005/06, the ORR reported on train performance that: "Train Performance: Good progress has been made in improving punctuality. The Public Performance Measure (PPM) of 86.4% in the year is up from 85.5% (refreshed) at the end of the third quarter (Q3) and up from 83.6% last year."

Railway Industry Planning Group (RIPG)
The Railway Industry Planning Group (RIPG), chaired by Network Rail, has as its purpose railway industry input into the structure and development of the national railway strategic planning processes. Its members are drawn from railway funders, operators and users, and the group meets quarterly to consider:
 * rail industry liaison with regional and local government
 * Regional (and Scotland and Wales) Planning Assessments
 * Route Utilisation Strategies
 * specification of passenger operator franchises
 * High Level Output Specifications and Network Rail’s Strategic Business Plan
 * Network Rail’s Business Planning Criteria, Business Plan and Route Plans.

Safety
The safety record of the company has been marred by the Grayrigg derailment, when a Virgin express was derailed at Grayrigg in Cumbria on 23 February 2007. Network Rail admitted responsibility for the incident. The RAIB investigation concluded in August 2009 that a faulty set of points had caused the derailment. On 13 January 2012 the Office of Rail Regulation announced that Network Rail was to be prosecuted under Section 3(1) of the Health and Safety at Work Act 1974 for "the company's failure to provide and implement suitable and sufficient standards, procedures, guidance, training, tools and resources for the inspection and maintenance of fixed stretcher bar points". At the first hearing at Lancaster Magistrates' Court on 28 February 2012, Network Rail indicated an intention to plead Guilty to the charges. On 4 April 2012 Network Rail were fined £4,118,037 including costs.

In December 2005 two young girls were killed by a train as they were crossing the railway line via a pedestrian level crossing at Elsenham in Essex. Network Rail was prosecuted for breaching health and safety law and fined £1 million on 15 March 2012. The court heard that risk assessments carried out by Network Rail staff in 2002 had identified potential dangers with the crossing and recommended the installation of gates that would lock automatically as trains approached, but this was not acted upon.

Private versus public-sector status
In 2001 the then Labour government denied that it had nationalised the rail network in order to prevent Railtrack's shareholders claiming, via the European Court of Human Rights, the four-year average price of Railtrack, about £10 per share. Instead, Railtrack's shareholders were given only £2.60. The commentator Simon Jenkins, writing in The Times, reported that Gordon Brown's aide, (now Lady) Shriti Vadera e-mailed Stephen Byers in July 2001 asking: "Can we engineer the solution through insolvency ... and therefore avoid compensation under the Human Rights Act?"

Railtrack plc was placed into railway administration under the Railways Act 1993 on 7 October 2001, following an application to the High Court by the then Transport Secretary, Stephen Byers. It was reported on 23 November 2001 that a further £3.5 billion might be needed to keep the national railway network running, a sum disputed by Ernst & Young, the administrators. To get Railtrack out of administration, the government had to go back to the High Court and present evidence that the company was no longer insolvent. The principal reason given by the government to the court for this assertion was the decision of the rail regulator – announced on 22 September 2002 – to carry out an interim review of the company's finances, with the potential to advance significant additional sums to the company. The High Court accepted that the company was not insolvent, and the railway administration order was discharged on 2 October 2002.

There has been considerable controversy over whether Network Rail is a public-sector or a private-sector entity. Although officially a private sector organisation, the fact that its debts are underwritten by the government, and it is partially funded by the government, has led to its being described as being "nationalisation in all but name". It is also claimed that the government is keen for Network Rail not to be classified as a public-sector organisation, as this would mean that the company's £30 billion debt. would be counted as public expenditure liabilities.

The National Audit Office and the Statistics Commission both treat Network Rail Ltd as a state-owned company. The Office for National Statistics (ONS) has repeatedly clashed with the National Audit Office and the Statistics Commission over whether the successor to Railtrack should be considered a private company – as the ONS believes – or included on the Government's books, as the NAO argues. The NAO says that as the Government is bearing the risk that would normally be borne by equity capital, and as it can appoint, through the SRA, a director who cannot be removed by members, Network Rail is effectively a subsidiary of the Government-controlled SRA. The Statistics Commission, set up by the Government to ensure that statistics are trustworthy, is known to question the basis of the ONS judgment that Government guarantees given to Network Rail are unlikely to be called in.

Even though the ONS insists that it is correct to have classified Network Rail as in the private sector the company is occasionally described as being in the public sector:
 * On 17 October 2002 in the House of Lords, government minister Lord McIntosh of Haringey, in answering a question, said: "The Question is about the West Coast main line, and it is true that the cost has escalated from a little over £2 billion to £10 billion. That shows incredible lack of control and forethought by Railtrack. We must get a grip of it, and we are getting a grip of it. However, we were able to get a grip of it only after it went into administration and we were able to take the company back again."
 * On 24 October 2005 in the House of Commons, former Secretary of State for Transport Stephen Byers MP said: "... I make no apology for ... unwinding the Tory privatisation that was Railtrack." And on 1 February 2007, then Leader of the House of Commons (Jack Straw) said: "... rail privatisation ... was one of the most catastrophic reorganisations, which we have had to resolve, and having done that— [ Interruption. ] The hon. Member for Wellingborough (Mr. Bone) may mock, but we brought Network Rail into public ownership..."
 * On 6 June 2008 during BBC Radio 4's programme Any Questions?, the Secretary of State for Innovation, Universities and Skills John Denham MP was asked about Network Rail's directors' bonuses; referring to the company, he said: "...it was a very good thing David that it was brought back effectively into public ownership after the total shambles that was created by dividing the railway up and privatising it."

In December 2013 the ONS Announced that from 2014 Network Rail will be classified as a "government body". This means that the company's debt will be counted as part of the national debt. This will increase Government debt by £30 billion, equivalent to 2% of GDP.

Allegations of misuse of public funds and discrimination
In 2009, allegations appeared in the media from the Transport Salaried Staffs' Association concerning treatment of Network Rail employees. Criticism included alleged bullying of staff and accusations that millions of pounds had been spent paying compensation and confidentiality payments to staff in cases of alleged sexual or racial discrimination. Former chief executive Iain Coucher was also accused of financial impropriety involving unspecified payments to his business partner Victoria Pender during his tenure at Network Rail.

An internal investigation held by Network Rail in 2010, vetted by its auditors PricewaterhouseCoopers, uncovered no evidence of wrongdoing. An independent enquiry headed by Anthony White QC in 2011 further examined the claims, but also exonerated Coucher.

The £1.6 million severance payment awarded to Coucher on his subsequent departure from the company in October 2010 was also the subject of criticism from the media, the Secretary of State for Transport Philip Hammond and trade union leaders.

Knighthood of John Armitt
Critical commentary appeared in the media concerning the knighthood awarded to John Armitt in the 2012 New Year Honours for services to engineering and construction. Armitt was Chief Executive of Network Rail at the time of the 2007 Grayrigg derailment and the family of a victim of the accident criticised the award, which coincidentally was conferred on the same day that Network Rail were prosecuted for the accident.

National Centre
The new national centre now known as 'The Quadrant:MK' is in Milton Keynes: it completed construction in June 2012. The complex is five minutes walk from Milton Keynes Central. The four buildings which are connected to a central street, accommodates about 3,000 people.

, the following departments are moving to the Quadrant:MK:
 * Safety & Sustainable Development
 * Engineering
 * Logistics
 * Operations
 * IT
 * Contracts and Procurement
 * Planning
 * HR
 * Finance
 * Asset Management