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Simon KirbyDirector, Infrastructure Investment
Our inheritance
• Network Rail took over the railway Network Rail took over the railway infrastructure in 2002infrastructure in 2002
• A maintenance contract structure with little A maintenance contract structure with little incentive for efficiency incentive for efficiency
• 4,000 mile backlog in renewals4,000 mile backlog in renewals
• Regional structure, no central controlRegional structure, no central control
• An explosion in costs from £3.3bn per year in An explosion in costs from £3.3bn per year in 1999 to £6bn a year in 20021999 to £6bn a year in 2002
Track replacement volumesTrack replacement volumes (miles) (miles)
Key challenges
• SafetySafety– Reduce incidents of broken rails, SPADs, Accidents, etc…Reduce incidents of broken rails, SPADs, Accidents, etc…
• Performance Performance – Reduce delays by around 33% over next 5 yearsReduce delays by around 33% over next 5 years
• CostCost– Improve efficiency by around 31% over next 5 yearsImprove efficiency by around 31% over next 5 years
• Work volumesWork volumes– Massively increase volume of work being deliveredMassively increase volume of work being delivered
And on a growing railway…
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06
Pas
sen
ger
Jo
urn
eys
(m)
940
980
1020
1060
1100
1140
Passenger Journeys
Growth in Renewals – 07/08Growth in Renewals – 07/08
£m
0
500
1,000
1,500
2,000
2,500
04/05 actual 05/06 actual 06/07 actual
+23%
+22%
0
100
200
300
400
500
600
700
800
Track Civils Signalling Estates E&P Telecoms
£m
05/06 actual
06/07 actual
+5%
+17%
+54%+30%
+59% +55%
Increased spend by asset in 06/07Increased spend by asset in 06/07
Growth in Renewals – 07/08Growth in Renewals – 07/08
£m
0
500
1,000
1,500
2,000
2,500
04/05 actual 05/06 actual 06/07 actual
+23%
+22%
07/08 budget
+10%
Enhancement spend
202 170 182280
388
642
806748 770 821
473567
1031
1411
100
300
500
700
900
1100
1300
1500
95/6 96/7 97/8 98/9 99/0 00/1 01/2 02/3 03/4 04/5 05/6 06/7 07/8 08/9
Mil
lio
ns
(£)
past spend future spend
Track renewals
Improvement in efficiencies
26%24%
10%
20%
0%
5%
10%
15%
20%
25%
30%
Controllable Opex Maintenance Plain Line S&C
22%
Projects
Our response
• National functional structureNational functional structure
• Maintenance in-houseMaintenance in-house
• GRIP GRIP
• Reorganising Track Renewals internally Reorganising Track Renewals internally
• Focus on costs, quality and timelinessFocus on costs, quality and timeliness
• Improving programme managementImproving programme management
Track renewals: current position
• Consistent improvement Track Quality Consistent improvement Track Quality
• Delay minutes reduced year on yearDelay minutes reduced year on year
• Good S&C performanceGood S&C performance
• Improving Plain Line DeliveryImproving Plain Line Delivery
• Plain Line costs improving but still not fast Plain Line costs improving but still not fast enoughenough
Track renewals: 2007 activities
• Fundamentally overhaul the whole renewals Fundamentally overhaul the whole renewals end to end process end to end process
• Reward best 4 of 6 performing contractors Reward best 4 of 6 performing contractors through competitionthrough competition
• Create efficient delivery methods for short Create efficient delivery methods for short duration possessionsduration possessions
Supplier rationalisation
• By the autumn we plan to down select the best 4 contractors (from 6)
• 4 Territory based renewals Contractors and 1 National high output contractor
• We will review the allocation of work to optimise delivery method and agent
• We will manage against key indicators and drive for collaborative and integrated working
End-to-end process improvement
• Accelerating engineering specifications
• Plan is to create a 3 year rolling renewal programme
• Whole process from maintenance through track engineering, planning and track renewals is being mapped & optimised
• Behavioural change and training programme being developed
Target Improvement
5%
10%
15%
20%
25%
30%
35%
2004/ 05 2005/ 06 2006/ 07 2007/ 08 2008/ 09
Circa 22% to 25%
31%
TargetCurrent positionPost-changes
Conventional Renewals
Conventional renewals
• Structured reviews of:– engineering specifications to deliver optimised
worksite packaging
– resource planning to increase efficiency
– mapping resource availability to demand
• Greater involvement in contractor management using performance indicators
• Higher-level cross industry cooperation
High Output MachineryHigh Output Machinery
High Output MachineryHigh Output Machinery
• Continued development of High Output systems (e.g. SLW)
• Potential acquisitions of additional plant
• Deployment of medium output solutions being progressed (e.g. MOBCs and Slinger)
Modular turnoutsModular turnouts
Modular turnouts
• Developing a systems solution to delivering S&C
• Standard products, factory built and modular delivered on bespoke wagons
• Lean manufacturing techniques in manufacturing and installation
• Through life benefits – quality, reduced maintenance, installed monitoring
• Will progressively replace conventional techniques – up to 75%
Modular turnouts
Controlled build
Delivered in-gauge
Modular installation
(on flat bed)
Conventional Renewals
54 hours Today!
37 hours Basic process changes & disciplines: incentivised, templated, site presence
27 hoursBearer Splice – road delivery / out of gauge
21 hours, or 2 x 12 hours Modular assembly, tilting wagon delivery,
improved excavation, ballast laying
8 hoursConsistent mid-week possessions
7 Day Railway
6 Day Railway
Conventional Renewals
Money / time
27 hrs
54hrs
12 hrs
8 hrs
37 hrs
Core possession time
Pro
cess
Spl
ice
Wag
ons
& A
ssem
bly
Man
ufac
ture
+?
£477k/ point end
£443k
£406k
Sub £350k
Best ‘UK’ Class
Equivalent Best European Class (today)
World Leader
GB (today)
8 hour plain line
8 hour plain line
• Concept study completed to explore principles and prove and clarify the remit
• Key objectives include:– Standard unit of delivery– Installation less than 8 hrs– Single line working– High line speed opening (85mph+)
• Full programme by mid-2007• Progressive introduction from 2009 anticipated• Will moderate, or reverse, efficiency aspirations
Simon KirbyDirector, Infrastructure Investment
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