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    Mod 6 The West Coast Mainline

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    VJ Qatar

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    © All Rights Reserved
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    of 7
    3.8 WEST COAST MAINLINE In this section we wil desribe the story of anothor large infrastructure project: tho West Coast Mainline (WCML). This brings us also to a diferent institutional soting since the project is located in the United Kingdom. The information presented in this chapter is partly drawn from the interviews held and report writen forthe EU. funded NETLIPSE project. The information and analysis was also used as a basi for chapter 4. Appearances and Sources of Process Dynamics; the Case of Infrastructure Development in the UK and'The Netherlands’ in the book Managing Complex Governance Systems (Toisman, 2008), In the Dutch cases we have mare or oss centro onthe elements of comploxity In the Swiss project we have added some first Insights Into the managoment of ‘complexity 2s wel, We wil continue to doo inthe ease ofthe WICML whore wo will ‘uarvens re mows -srmecire wm coMENTY 1 show how major changes inthe institutional context along with major diferences Fastestjoumey umes | PreProject | May 2006 | Post Project | Reduction in Jn management have lead to completely different rosults. But we will start of with oleae Conc faepoyy reno presenting th facts and figures ofthis highly dynamic projet rood 35.1 Project Facts & Figures and stakeholder constellation Potion fer iA i a Manchester a | _2ho5m_| them Projet Purpose and Project Detnition Lisep20 wa | 2noom | 205m Preston anasm | ahiom | mom | 12a “This section roprosents the ataus of the project as tthe start of 207 Glasgow hoor | ah2im | ahiim | 107% “TheWest Coast Main Line (WEML) is Europes busiest mixeduse ratway (so figure 3.23. Inks London with major urban area inthe northwest. Mare than 2000 trans a day ia tse the tne, transporting both passengers and freight. The tran services consist of ong igiailese coho ‘stance, regional an local (short distance) commuter trains, along with substantial freight ee " ; = a atfc-The later represents around 40% of tho total a feight trafic overnents inthe UK. “TheVWCML relates othe 650 km main fine betwean London Euston and Glasgow, which Ontpeak a 08 7 also serves the West Midlands (irmingham), the North Wrest (including Manchester 8 Liverpoo!) and North Wales {with connections to & rom Ireland. Presey there are some Tin 2. WML Femi 22 milion passengertrain km a year and 6 milion feight-rain km a yoar. “The objectives of the WEMIL project have sited several times The current objectives (2007) were formulated in the WCML Strategy report of June 2008: 11 The upgrads had not only to addoss the major backlog of maintenance and renewals eens (0 the outa, but should also ensure value for money; 2 The uparade should azo eetablich euetainable and cot effective maintenance regimes: a 3 The upgrade should provide addtional capacity for anticipated growth in passenger yen ‘and freight business over the next 20:30 yoors, with substantially faster and more _ campetiive journey times between maoretios saved by the West Coast route; 4 The upgrade should ato provide an improved level of performance, safety and reliability which wl in tun, help the rallway regain ost market share and increase the rola itcan play inthe national and regional economies: ‘5 Finally the upgrade should achiove above the objectives ona ‘allway in use" allowing {or the continuation of fright and passenger services during the rebuilding and ‘enhancement work Inmeeting the shove objectives the projct wil dlivar a modemisod and sustainable West ‘Cosst raiway. The suecess ofthe project will alco depend on koy outputs being achieved {or example, 8 125 mileh route between London and the West Midlands, Manchester, Liverpoo} the North West, North Wales and Scotland, exploiting the capability of tting trains to deliver much faster journey times. There wil be capacity for 80% more long Figure 2.28 Woot Cone Minin stance passenger teins than today and for up t0 60-70% more freight paths than at present Facts and Figures Renewal olaments “+ Track works: 780 miles of track (ut of a total of 1,680) ‘+ Bridges: 90 spans “+ Number of stations: 2 intercity & 30 regional local Finance “The first calculations ofthe costs of the upgrade made by Railtrack FT} wont no high than €2 bn. More realistic estimations at tho beginning of the 2000's indicated that 4 renewed and modernised line might wall cost in the region of some £13 bn. pus. Government, as pat ofan agreement, approved the project budget based on tho content ofthe June 2003 WCMIL Strategy report. The budget was set at £9,9 bn. (2002/03, price lovell Cost contrat has been achlaved and the project has been kept wel within ‘his limit, By joint assessment of cost reduction opportunites, value maximisstion and scope contro, the current baseline amount to £8, bn. (2006106 price level. ‘Although the UK ral industry has beon privatised since 1994, iis st ‘substantial public subsidy for both capital investment and ongoing, sient on venue suppor. “The funding flows according to figure 3.24 oo a on Faure 3.24: Fundlng ws fer ho WestCoast Proyrare Planning Pretont tage of project (1 January 20071 | Approximately 29 completed final 1/3 ‘completed bythe end of 2008), “Tim of decision to build (golno go docsion) | Spring 2002 (present project) “Tine of set of constrction works 2002 (ori work star. in 1858) “Time ot delivery ‘Dacember 2008 complete proeet) “Tim of begin operations ‘Staged between 2004 2008: Sant 2004: Loncon Euston Crowe ‘Bee 2005: London Euston ~ Glasgow es 2008: Al Contracting [Network Rail has a formal procurement and contracting strateay: ‘+ EVand UK regulations are the basis. “+ The proferred contracting option isto enter a series of contracts split by discipline withthe contract deliverers, rather than to main contractors ~ who then sub ‘contract the majority of work and in effct act as Construction Managers. +The preferred forme of contract will be ether fixed price, lump sum or "bids of quality with e-measur + Dus tothe nature and present time seales each contract will need tobe reviewed independently to determine the form of contract. Organisation Given the high profile nature ofthe project, the importance ofthe route an the high level of expenditure, the government decided in October 2001 to take tha strategic lead for the project through to completion, with Network Rall being responsible forthe delivery of the infrastructural aspects. “The governance ofthe project is managed through a Projact Board. See figure 9.29, {or the project's governance arrangements in December 2002. This Board is made up ‘of Network Rail,The Stratagic Railway Authority (SRA|, and Orfice of Rail Regulation (ORR) Board Members and Notwork Rall and SRAWest Coast Directors, dealing with strategic decision-making, Reporting to this Board is a Project Development Group (Notwork Rail, SRA & ORR) dealing with detaled decision-making on dlivery, costs, resources and operational issues and aWCML Joint Board {train and freight operators) considering operstional performance and maintenance issues. Reporting to the Development Group are Network Rails and SRA West CoastTeams. serena 1 mosters-stavequne wri ourAETY 1 4 Figure 2.25: WEML arceets governance erargementsiDacembar 2002) ‘Stakeholders: intemal and extemal ‘The first aroup of internal stakeholders are those partis within the rll industry, oF those directly associated witht that pay a direct ole in the delivery ofthe project and are directly affected by its outputs. These partios comprise the following, see next table. nteral Stakeholder: ‘Responsibity: ~ Government (represented by thaSRA | Project strategy definition. palort Summer 2005, OT after summer 2008) = Network ai @notforpraft organisation | Infrastructure works dlvery. Passenger eight tan operators in sarin delivery (Umetabes, revenue generation and customer srves. * fica ofall Roguation ORR! (prior to | Protction ofthe interests of users and the “huly 2008 i Regalo) promotion of competion, effiency and fconomi inthe provision of rail Serviens Each ofthese patos has a major responsibility inthe project.The projoct was presented a "Britain's always working together? [External stakeholders re the bodies that are indrocty affected by the outputs ofthe project; that can influence funding oF support forthe project; and, in some cases, Which have a statutory sight to be consulted in the process of development of the ‘project In total there are over 700 organisations identified and the Department for ‘Transport and Rail (DFT) contacted each of them individually External stakeholders are separated into 2 groups: a group which the West Coast “Team has to consult from a statutory standpoint, which ike the Passenger Transport Authorities and Executives have responsibility forthe delivery of regional transport serves in tha major provincial tie. TheWiest CoastTeam does not have to consult the second group from a statutory responsibilty (none ofthe bods in the second group hhasa ‘veto’ over the content or delivery af the work being undertaken, except in for few Jocal planning ssu2e). Howover, consultation ofthis group of stakeholders is highly desirable, because it a vital to ensure that ther local knowledge is aligned withthe ‘overall direction ofthe projec. Many ofthe bodies ropravont aroas that would benefit by the improved services or would generata business to support the investment, In order both to inform snd to seek agreement to the strategy underpinning the Fovised project scope and outputs, a consultation document was publishad in October 2002. This was provided to all partis i both the frst and socond groups. Det ofthis activity andthe results of the consultation exereise are contained inthe final WOME Strategy repor published in June 2008. “There continues to be an ongoing dialogue with extemal stakeholders, to keep them abreast of developments at the side ofthe WCRAL, burt also to consult with them aver the more detalod aspects ofthe project as they emerge, and to receive ry indications about developments inthe stakeholder context that could be toful or prejudicial to the process of upgrading, To facilitate the link with such bodies, a number are grouped together. An organisation entitled West Coast Rall 250" represents many ofthe local authorities along the line of route and also has 2 Parliamentary branch enabling a direct dialogue with Mombers of Parliament. DT, ‘along with Network Rail and the train operators, continuos to moet this body on a regular (bi-monthly) basis. 352 StorylineWest Coast Mainline ‘Built in tages over throe decades from the 1830s. The description of the reconstruction ofthe line starts in 1884 Inthe case ofthe Wet Coast Mainline there is 2 variety of crucial events. We can distinguish three institutional periods starting and ending with main events n this ‘section we summarise the key elements in which we illustrate the complexity and how it was managed. cena ne rnc -snoouNa mK COMPLDATY 1s Round 1 Locked in @ non-innovative British Rail 1984-1990 rah Raitways was created in 1948 out of ailing private regional rail companies which ‘vere bankrupt following the stresses ofthe Second World War, British Ral was for 8 Jong period the manager of the Wost Cosst Mainline. Although the route was extensively renewed and upgraded as part of major eloctfication investment schemes, work earied ‘out since has been limited. Athough British Rll recognised that further renewal work ‘wes necessety ancl contemplated options during the 1980s, the route had not seen any ‘Significant renewal since its elactificaton in the 1960s end 19709. This pariod can be ‘described asthe public monopoly period: British Rall asin charge, had aot of tacit knowledge of what should be dane with the West Coast Main Line, but did not have the ability to putthis into eton. The main objective seemed tobe ‘preventing the system from breaking down, Money wes put where the biggest impact on reducing failures with severe effects wore expected. The route neoded renewal nthe 1990s because, with is Infrastructure ageing, train service reilly was deteriorating, leading toa fallin demand. Plans for upgrading the ine wora made, but wore never implemented, “This, combined with the overall global wave of privatising and market orientation ed to the erosion of support forthe nationalised Bris Fal and stimuleted people to lock for ‘other (and therefore private) approaches nthe mia 1980s the breakup and privatisation ‘of Bch Rail was completed. This ended a period of stagnation and tochnical degradation ‘on the WML. Round2 Chaos in the private domain: Tho story of broken dreams 1990-2001 “The Railway Act 1953, introduced by John Major's Conservative qovernment, started the privatisation of Brith Rai. Brtich Rail was broken up into over 100 separate companies And sold off By doing 90 the Railway Act 1883 created a complex structure forthe rll industry. Raltrack (RT) took over ownership for all track, signaling and stations and was hastily privatised i 1997 In 1996, the Passengor Upgrade 1 (PUG!) contract was agreed between Raltrack (AT) an the Offic of Passenger all Franchising (OPRAF) to modernise the rail infrastracture with existing technologies. RT then owned and was responsible for ‘operating, maintaining, renewing and developing the rail infrastructure. Virgin Rall Group (VAG) a joint venture of thaVirgin Group and the Stagecoach Group won the franchise to ‘operate long-distance passenger trans on the WML in 1997 until 2012. Howaver Virgin Rall Group (VRG) wanted to go further than PUG. Itagreed with RT a renewal and upgrade programme known as Passenger Upgrade ?(PUG2) that allowed higher speed traine with a higher frequeney. VRG took tho view that significant increases. Incapacity would be needed fr its fanchisa. Ater boing approved by OPRAF and the Rail Regulator, PUG 2 was signed in 198. I and VAG were confronted with the worr-out line and startd enthusissticaly with Plans for high quality upgrading. Thee plan was reant on new technology, such as raving block signaling to increase capacity and tain speeds at low cost. The plan dawn tp by Railtrack estimated that tha upgrade would cost £2 bn. and would by eady by 2005, lin two phases: 2002 and 2005).The ambitions were high: the upgrade would ut joumey times from London to Birmingham from thr 40 minutes to Th. This would be achieves through increasing the line speed to 225 knit, VIG ordered a fleet of new iting train that would be capable of running at 40 mite, with dolivery planned for May 2002 ‘oth the private newcomers, Railtrack nd Virgin, wore anxious to show how an ‘innovative, quick ane smart privata sector could deal with the neglected system. They focused mainly on financial return, delivered through innovation and market expansion, “These objectives were atthe care of the contracts between RT andVirgin to upgrade the ling =the core purpose wes to make manoy,rathor than deliver transport improvements. “The wo private partoe however seriously underestimated the restrictions that came with the existing lade of quality on the fine. “Tho prograrnme ran int difficulties, RT's estimates ofthe expected fina cost increased rapidly an in December 1999 Railtrack decided not to use moving block signaling, ‘8 tha technology wes not sufcionly mature. Other factots, including West Const contact ables, coated a financial esis fr RT which resulted in October 2001 in the ‘government puting FT into Railway Administration n effect Railtrack was bankrupt. VAG's procurement of ts new tting trains rolling stock also fall bhind schedule. With hindsight the plan wes doomed from the beginning, since Raltack had not assossed the technical viability of moving block signaling’ prior 1o promising the speed increase toVirgin {and the Government. Moving block signaling had never been implementad on such 8 ‘complex line as WML before. It soon bacame apparent to experts thatthe technology ‘was not mature enough to be used on the line. The bankruptcy of Tn 2001 brought 2 reappraisal ofthe plane whilst the original costs of tho upgrade continued t soar The revised estimates indicated thatthe line upgrade would costa total of 13 bn. and would be ready by 2008 with a maximum speed of 200 kms for titing trains. The everpresent ‘phantom’ of cost overtun and delay in infrastructure was begining to re-omerge. We have refered to the PUG2 contract. In interviews, we heard a fmly negative judgement about the contracting by Railtrack to Virgin in PUG2. Two quotes taken from the Inorviows: “Ratack ws bank aot avay coma” “Contactors hed basal Raita’ chaque book” Manager Wet Coast Mang, intervow 2006. Due to ignorance anc! lack of local knowledge ofthe ral system the two parties ‘managed to make highly ambitious, but unrealistic (in retrospect) plans and contracts, 18 hhoping for tho big money prize. In the process they created enormous cost overruns {and delay, contributing significantly tothe fell of RT and the neod fora new project definition by public authorities. A further dramatic moment occured with the railway ‘eccident at Hatfield in 2000, where the lack of competent asset management led to tho derailment ofan East Coast High SpeedTeain. In order to deal with the perceived risks, RT imposed over 1200 emergency speed restrictions on its network, creating enormous delays and severe losses for the sevice providers. This wes a ci ‘moment of csi, The lack of asset knowledge in PT became fully apparent tothe Secretary of Stat forTranspor, John Prescott decided that SRA, a non-departmental public body responsible for providing stratogic direction for the British ral industry {ould impose a solution for this crisis. This moans tht political intervention led to the return of Railtrack and its assets into the public soctor as hastily as it was previously handed over tothe privat sector. Virgin renegotiated their contracts with the government from high ris, high return to lor vsk, low roturn Round 3. Reinventing public-private cooperation: A realistic approach 2001-2007 In Autumn 2001, Government took direst control of BT and its assets. As already noted, Secretary of State for Tansport, John Prescott decided that Strategic Rail ‘Authority SRA, should impose @ solution. The renewed role for government did not lead to a return tothe Brith Rall regime since many aspects of privatisation had proved to be successful. SRA concluded that abandoning the project was not vieble. {80% of the works ware neaded to replace ageing infrastructure and canceling works already contractually agreed would incur substantial financial penalties. The project ould however be reepecfied with deliverable outputs and a clear postive business case, In 2004 the SRA in its turn was abolished, Is stratogc tasks were transferred to the Department forTeansport (OFT), as was the letting of contracts for passenger tranchiges, The operation of the infrastructure remained with Network Rall, the successor of Network Ral “The WCML Strategy report, published in June 2008 addressed the need, not only to repair and rene the railway to ensue its continued operation, but also to provide the eapacity and capability for high-epeed long distance trains, Moreover, it allowed the continued provision of focal and regional passenger services and the serving of the important freight market. twas decided that proven technology was tobe used wherever possible: the project had a huge scale and could not continue to ‘be burdoned with the uncertainties in timescales and costs associated with the dovelopment of new technology. A business case was built, leading to clear insights ‘about the revenues of upgrade aetivitas and working as @ communication instrument ‘vith al patios involved, Finally the predictions ofthe cost ofthe project were brought beck from £19 bn, to £9 bn, following further cost raductions the expected ‘costs are less than £ 8 bn, (December 2006). “The Wost Coast stratagy was built upon an extensive consultation with stakeholde both within the railway industry and with other intrested bodes, such as local Authorities and user groups. Trust was built up and kept. Indeed, there has been ‘overall consensus throughout over the specification and dolivery of this stage of the West Coast Project. These close links have been maintained and have assisted the continued development ofthe route and its outputs. “The WCML Strategy report sets out thrae stages of project dalvory. The first ofthese was introduced in September 2004, involving the upgrade of the line between London Euston and Crewe / Manchester. These olso enablod accelerated improved services, tebe introducad on all key inter urban corridors, including increased frequencies nd faster journey times. Trains were also permitted to operate et 125 mila in tit ‘mode south of Crewe. The second stage was planned in 2005, when the line North of ‘Crowe was upgraded to provide for 125 mile/hr in titing mode. By April 2006, around three quarters ofthe physical work of tha project was complete. Remaining key works include the enlargement of Milton Keynes and Rugby stations and the widening of the rent Valley route (third stage). “The upgrading activities are performed mainly by Network Rail. They prepar schernes for upgrading pats of the lino and announce when the line Isobe closed for uso. The line is out of use toa considerable extent, especially, at weekends, Nevertholosit seems to be clear thatthe upgrading activities wil be finished in 2008. The first Pendoino trains ware operating on the WCML in 2008 and the amount of users fs growing very strongly. The expectation is tha, at constant price levels, revenue wil riple between 2003/04 and 2012/13, from just over £300 min. p.. tof 1 ton pa. and that freight trafic on the route will lso grove strongly. Looking at these achievements one could say “alls wel, that ends well; ut there was some significant ‘waste in the early, uncontrolid, days ofthe projact, mostly borne by the foss inthe Share prieo of the private infrastructure contelle, Railtrack. “The aporoach in thie third round of upgrading was cfiferent from the previous rounds. Tho strategy was build up in consultation with shareholders within the industry and with stakeholders such as local authorise and user groups. The passenger and freight operators, who had been excluded from contributing to the project, became hoaviy involved and provided the SRA with an immense amount ‘of proricat advice and guidance. This plan was not made in

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