Ben Webster, Transport Correspondent
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Network Rail is to take another step towards renationalisation by stripping its contractors of responsibility for some key upgrades and taking much of the work in-house.
More than 250,000 passengers had journeys disrupted by the four-day overrun at Rugby and a similar 24-hour stoppage at Liver-pool Street station in London after Network Rail admitted that it was caught by surprise when projects overran badly over Christmas.
The Times understands that contractors are likely to be removed from the role of overseeing schemes and could eventually lose much of the £2.5 billion of work commissioned by Network Rail each year.
The move would be the latest step in the creeping renationalisation which began in 2001 with the Government’s decision to replace Railtrack with Network Rail, a public interest company with no shareholders. In 2003, Network Rail announced that it was sacking all its maintenance contractors and bringing 15,000 staff in-house to carry out day-to-day repairs.
All major upgrades are still done by contractors, but Network Rail yesterday signalled that it was reviewing their future role with a view to doing more work itself.
Iain Coucher, Network Rail’s chief executive, is understood to be furious with Bechtel, the coordinating contractor for the upgrade at Rugby. The project should have been completed by New Year’s Eve but overran by four days, severing the West Coast Main Line and forcing more than 50,000 people a day to catch replacement buses. The contractors failed to supply enough qualified engineers to replace overhead lines, forcing Network Rail to step in and take over from Bechtel on New Year’s Eve.
A senior Network Rail source said: “We are absolutely seething about some of our leading contractors, notably Bechtel, which completely failed to deliver on repeated promises given before Christmas.
“This episode calls into question the future role of contractors and one of the options is to take more of the work in-house. When the model of using an outside project management company fails as badly as this, we have to ask very tough questions.” Other contractors who may lose work include Jarvis, Balfour Beatty, Amey and First Engineering.
The Rail Regulator is investigating what went wrong at Rugby and also at Liverpool Street, used by more than 200,000 passengers a day. The regulator is likely to fine Network Rail several million pounds, though it is unclear what effect this will have as the company is dependent on public subsidy and reinvests any profits in the network. Network Rail will also pay millions of pounds in compensation to the train companies, but very little of this money will be passed on to passengers.
Network Rail claimed that it had been unaware of any problem at Liverpool Street until 1am on Wednesday, less than four hours before the lines were due to reopen. The company said that its contractors had failed to keep it up to date with their progress, especially in replacing overhead power lines.
National Express, which operates services into Liverpool Street, said part of the problem was that resources had been diverted to Rugby. An upgrade at Stevenage was also abandoned so that engineers could concentrate on Rugby.
David Franks, rail director of National Express, said: “The contractors appear to have gone where they were going to get the most cash.”
Bechtel was overseeing eight other contractors at Rugby, which was being redesigned to create a new platform and allow express services to bypass the station at 125mph. Bechtel failed to return calls from The Times last night.
Jeremy Candfield, the director-general of the Railway Industry Association, which represents Network Rail’s contractors, said: “It’s premature to say what happened at Rugby, but we do not believe there is a generic problem.”
Mr Coucher, who was belatedly called in last night by Ruth Kelly, the Transport Secretary, to explain what went wrong, has himself summoned Bechtel and other leading contractors to a high-level meeting next week.
Mr Coucher, who has a salary of £466,000 and received a £76,000 bonus last year, confirmed that normal service would resume this morning. He said: “I can take no comfort from this news in the knowledge of the pain and inconvenience we have caused passengers over the past few days.”
Gerry Doherty, the general secretary of the TSSA white-collar rail union, said that the large number of contractors involved at Rugby had been a “recipe for confusion”.Bob Crow, the general secretary of the Rail Maritime and Transport union, said: “It is ludicrous that work planned months ahead should have overrun so seriously because there weren’t enough contract staff to do the work.”
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So Network Rail say they were unaware of a problem at Liverpool Street until 1am on Wednesday. Where the hell were the Network Rail managers dealing with this particular contract? Tucked up in bed I suppose. Talk about no pride in their work - they should have had their finger on the pulse a lot earlier if they truly cared about progress of the works. As always, go for the soft target. Even if all works are taken in house, who do you think will be the people employed to carry on with the work? Yes, the very same labour, engineers, supervisors, etc. that are currently employed by those nasty contractors!
Craig, Pinner, Middlesex, England
Becthel also do work for the DTI on projects which have failed just like they have for Network Rail. Maybe we should look to hiring UK Project Management companies rather than use US ones like Becthel. Our UK expertise is the best in the world so why do we send give our tax payers money to the US companies? Not that patriotict are we?
Warren Butt, London,
slightly unbelievable to still be reading people supporting the private rail, health, education systems. I think unless you're emplyed by one of those companies and your daily ration is being compromised, it's quite transparent to see that privatisation has been a sheer disaster. Hundreds of dead passengers, patients and burguer school children with no erudition to enjoy life... all part of the lies Thatcher fed us when she told us we'd only have to work 4 days a week (if we gave national companies to her private chums). How sad, one party, one policy, three masks.
Bob, Harrogate,
in house maintainece is always the best option as the engineers take pride in what they have done and any failure can be quickly pickup contracted out maintainece is only as good as the profit that can be made and dont forget the engineers have to move on whether job is finished or not
b clarke, cardiff, wales
When the dust settles and the over zealous Network Rail analyses why they attepted so much work over some 10 days, in the middle of a festive season, in winter on the shortest days of the year, perhaps logic will return and reality will sink in. Becthel have been doing Project Management for years and though expensive to engage, have a track record second to none and many clients return to use their services. Also the contractors such as Balfour Beatty have sound proceures and carry out all sizes of projects worldwide, so it is just unrealistic to consider that experienced construction professionals would have deliberately run late. Think again Network Rail.
chris smith, East Sussex, UK
All of the industries that belonged to us were sold off by the greed party (railways, gas, water, electricity). Even hospitals were safe places to be ill in, before private contractors took over the cleaning; after that, MRSA et al.
We need to complete this process by making all of these industries non-profit and hiring people rather than paying contractors. It's well known that a contract company doesn't necessarily know about the business, or care. The only thing that matters to them is how much profit can be made.
Paul Kemp, Cranham, Essex
It's all very well for Network Rail to decide to take this engineering 'inhouse' but do they have the expertise? If so, why did they not do it 'inhouse' in the first place?
It sounds like an absolute failure in planning, and to blame a lack of 40 engineers (all with hangover problems, we are told) out of a total of 400 engineers looks quite implausable.
At what stage do individuals making important decisions become accountable?
Graham, Dorking,
Privatise it all, including the rail. Just don't make the mistake of granting a monopoly.
No government has ever been good at running a business. There is no incentive to efficiency and it is too easy to obscure failure. The public sector is really just a different form of monopoly. They are just as likely to neglect service standards and are less likely to allocate capital efficiently, ensuring poor service and wasted tax dollars.
Full privatisation would eliminate the cost of government overhead, decreasing both taxes and rail operating costs. It would force the private operators to manage capacity better to meet demand, rather than operating to government schedules. So what if some of the economic surplus ends up with shareholders and executives. If they are creating the surplus they deserve it. And not all profit will end up in their hands, a lot will be re-invested to improve rail assets, rather than squandered in public sector empire building.
Andrew, London,
I hope that Network Rail are serious about what they are saying. Perhaps it will make all outsourcers think twice about overstating their capacities so a sales man can meet their targets.
My personal experience of the railways over the past few years lead me to believe that Network Rail is a well run company but this could all just be a lot of sabre rattling to make the public and the regulator think NR are on top of things.
Andrew Doyle, Manchester,
With the problems at Liverpool St, that was caused by the removal of an old bridge as part of the East London Line extension. Can't wait to see what happens when they put in the new one ! As for the West Coast main line, in the '60's when electrification started many trains were diverted by the Great Central (Manchester, Sheffield, Nottingham, Leicester, Rugby, London Marylebone) whilst the engineering work took place, so no disruption (or buses) there. Of course thats been shut for 40 years. Shortsighted? yes, but then thats been UK transport policy for years
RoyTheBoy, Brooklyn, NY, USA
I bet Bechtel was paid in full - and a handsome bonus for the bosses.
GJB, Slough, Berkshire
A Labour Quango fails to deliver for the government so they decide to renationalise it. Excellent prudent use of tax payers money.
Can't wait till RMT and associated unions are all on strike again.
steve, chester, cheshire
George, at least under British Rail I could take the train from Leeds to London, and back for less than something which represents a transatlantic airfare.
Philip, Leeds,
Good business case, eh Mr Coucher?
Rob, Brum, UK
As a right wing conservative and a frequent taveller to the UK over the last four decades I must admit that Brirish Rail was a service of world class. My ancestors are turning in their graves listening to me applaud the return of Nationalized Railway Services.
Harriet Green, Vancouver, BC, Canada
The BBC reported as long ago as October 2003 that: "Network Rail is to stop using private contractors to maintain Britain's railways."
So what has been happening since 2003 if Iain Coucher is now blaming Bechtel, an outside contractor, for the recent fiascoes? Maybe senior Network Rail managers should have explained to them that just talking about a plan does not mean it's going to happen. I would explain it this way: "You're fired!"
Mike Mitchell, Spalding, England
A case of too many 'Chiefs' and not enough 'Indians' (if one can still use expressions like that, these days).
The whole way we run our country now, starting at the top, is that the clever talkers tell everyone else what to do and then blame those same people when it all goes wrong. The real skill is with the engineers.
MarkS, Leeds,
On this specific issue, probably the most important piece of UK track has the most important and major changes planned for it. The Chief Exec responsible for the work being carried out failed to listen to advance warnings that his planned timetable was likely to fall, or, did his staff fail to alert him to these warnings. Either way its his management that is the cause of this particular mess, and it wouldnt have mattered whether this was in public or private control or indeed in this century or the last.
alan, warks, uk
The fines are just paper money. The train companies receive fines from Network Rail. The train companies are fined for late running of trains. And the trail goes on. The banks in the meantime are laughing at all this as they own the rolling stock and make a fortune from leasing to the train operators.
So I wonder where the engineers will come from to take over these projects? Would they happen to be from the contractors that are being sacked? Can't see their attitudes changing overnight.
Jay, Newbury, England
To put it succinctly: This is what you get if you place public transport into private hands, and even more so when those private hands are from the USA originally.
Hans de Koning, Leiderdorp, Netherlands
Am I supposed to be surprised? I commute daily and see how the train operating companies perform. Network Rail is not vivible, except through the predictable delays due to failed signals and over-running engineering works.
The fact that Network Rail did not even know that the over-runs were imminent shows a common feature of both the TOCs and Network Rail: a lack of respect for the customers. Customer satisfaction is seen as a target, not as a duty.
First Great Western, for example, do not know the daily expected demand on scheduled routes. You would imagine that they should know, because tickets are purchased from station A to station B. However, responses that I have received state that this information is not used to record expected customer demand on scheduled routes. The inforrmation is used to record sales, and thus profit. How can a TOC assign carriages to a service when it has no idea of how many passengers are waiting at each station during the commuter rush hours?
Simon E. Bode, Bath, Avon, UK
We are exhorted on all sides to leave our cars at home in the interests of the survival of the planet, but when we do we are faced with expensive, hellish journeys provided by the greedy bosses of the rail companies and their contractors. It is time the government took a firm line with all these incompetent and mismanaged organisations. Fines are not the answer, after all it is ultimately the travelling public who end up paying for them.
Seems to me there is no one out there who cares either for the long-suffering passengers, nor the survival of the planet. Does no one think that maybe we could see how they do it abroad, France, Germany, Spain, and Japan manage to do it better. Come on rail companies, Network Rail, government, get communicating and sort it out.
Liz, Altrincham,
if you pay £14 per hour all hours for skilled steel erectors ect over 10 days for christmas new year you wont get the men or the job done
joe, manchester, uk
I can't help feeling that these engineers are being used as scapegoats.
Network rail may have not have allowed a reasonable time slot for the amount of work that needed to be done but contractors are the perfect fall guys when the sh**t hits the fan!
Why do large companies always use contractors?
Its because in the eighties with Thatcher at the helm, engineering and construction were treated with complete contempt, thousands of engineers were either made redundant or given early retirement now we are paying the price.
At one point we were bringing in engineers from the Indian railway network that was built by Britian!
Engineers charge what they want because their numbers have been decimated by a country that thought it all it needed was bankers and accountants.
You could sack Bechtel tomorrow but the same engineers will be back at work next week!
Graham Wharton, St Albans, uk
Bringing it in house will make no difference.
If you cannot manage it when contracted out, you will be less able to manage it when in-house.
Similarly, contracting out is never a remedy for bad in-house management. If you can't manage it in house, you can't manage a contractor either.
What we are seeing is very simple: the typical total lack of real management that characterizes all nationalized industries. British Rail had it, and so do its successors. It takes years, and battles, and determination, and facing down the unions, to install management after privatization, and British Rail never did it.
George Johnson, London, England
Handing vital services to private companies interested only in their salaries and shareholders' approval was the stupidest thing the goverrnment has ever done. And for that prize there has been some pretty stiff competition.
If the people in charge were really alert, then seeing people dying after train crashes (the rails weren't maintained properly by profit-hungry maintenance firms) should have been evidence enough. But it wasn't, as they dragged their feet and handed out confusing PC statements designed to dissipate every last ounce of emotion.
Railtrack, Network Rail, LNER, South East, Network Express, Connect this and that, Trainonline.. who the hell knows which web site to go to for information? Renationalise it, fill it with people who spend their whole lives dedicated to their job, and the sooner the better.
iain carstairs, bedford, uk
What do you really expect when the railways were privaitised? A service became a business and as a business profit and director's pay became paramount and the whole concept of providing a service was abandoned.
A.W.TURQUET, WELLINGTON, NEW ZEALAND
"Network Rail will also pay millions of pounds in compensation to the train companies, but very little of this money will be passed on to passengers."
So where does it go? Surely it isn't another windfall for this lot from the public purse? How much more of our money does the government plan to hand over to the private rail companies for no return?
Jamie Gilmour, Bolton, UK
So it did not know it's contractors were behind, how odd that a main contractor would not know what the hell it's sub contractors were doing. I've worked in the building trade most of my life some of this time spent on bridges for the railways, they had engineers with us all the time and if they are saying they did not have an engineering running the contracts, bloody hell something must be wrong.
We are going back wards with contracts handed out Willy nilly and without the correct infrastructure in place so people know what is going on. seems odd to me.
Robert., wales, uk
BRAVO!
The rail network should never have been privatised in the first place.
Its a bit like the water and utility companies.
The idea that they are seperate entities competing is ridiculous.
Instead, what we have been served is private monopolies that serve their own interests until the cake is finished and the remainding problems become our latest tax hike.
These entities arent being privatised as much as they are being short term privateered.....
Any minute now, jack |Sparrow will pop up....ooo arrrgh!
Pazz, London
pazz, london, England