Planning trains and track together could cut hundreds of millions from cost of Britain’s railways says industry

Publication date: 6 October 2011
Author: Network Rail

Tagged with: Network Rail, Paul Plummer

Hundreds of millions of pounds could be saved on Britain’s next generations of trains if the rail industry works together even more closely to plan them, a Network Rail report reveals.

The Network Route Utilisation Strategy: Passenger rolling stock was produced in collaboration with rail industry stakeholders, including train operators, governments, manufacturers, rolling stock leasing companies, passenger representatives and passenger transport executives.

The RUS states that by improving the planning of infrastructure, reducing the differences between different types of trains and taking advantage of economies of scale in commercial negotiations, potentially hundreds of millions of pounds could be saved over the next two generations of rolling stock. This approach echoes recommendations made by the government’s recent rail value for money study, chaired by Sir Roy McNulty.

The strategy recommends the rail industry should:

Plan infrastructure together with the requirements of new rolling stock to give the industry best value for money
Consider those infrastructure works needed to allow rolling stock to be interoperable within the market sector it serves
Exploit the economies of scale in procurement wherever feasible in commercial negotiations, by looking to reduce the key differences between the types of trains in a competitive market

Paul Plummer, Network Rail director, planning and development said: “Together the industry needs to help inform government decisions about what it wants from the railway and, once specified, it needs the flexibility to deliver these requirements in the most efficient way. We look forward to working with the rest of the industry in this area.”

The RUS also shows:

Passenger rolling stock costs are currently £1.8bn per year – 15% of the railways’ annual running costs
There are now 12,000 vehicles on the GB rail network today, divided into 64 different rolling stock classes
5,000 new vehicles have been introduced to the network since 1996
The average cost per vehicle, according to the Competition Commission is £1.1m
Owing to the plethora of different vehicle designs 8% (£75m) of average procurement costs is on non-recurring costs associated with the development of bespoke rolling stock
20% of procurement costs could have been saved between 1988 and 2010 if there had been continuity of orders