13 March 2008 | Paul Snell
Network Rail's supplier management has been strongly criticised by the Office of Rail Regulation (ORR) and blamed for the chaos that beset the railways over Christmas.
The rail safety and economic regulator hit the infrastructure operator with a £14 million fine at the end of last month, following the overrun of engineering projects over the Christmas period that caused severe disruption to the network.
"It is quite clear from our thorough investigation that Network Rail is failing to manage major engineering work as consistently well as it should," said Bill Emery, ORR chief executive.
He said Network Rail had not achieved the appropriate balance of financial risk and reward with its suppliers. He added the company needed to develop a "genuine spirit of partnership", as airport operator BAA had with its suppliers during the development and construction of Terminal 5 (see cover feature
The report said Network Rail's supply chain partners were keen to co-operate with plans so as to secure contracts in the future, which may have given rise to "a degree of overconfidence" in the amount of work that could have been delivered.
It added weaknesses in supplier management were probably not confined to the cases over Christmas, but "were present to some degree more widely across the organisation".
"The events investigated here demonstrate that Network Rail does not yet have the degree of understanding of its supply chain that it needs to schedule these large programmes robustly," it concluded.
Ian Coucher, Network Rail chief executive, said: "We agree and accept the findings in the report. We will make changes to the way we plan and manage future work on the railways."