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Rail: North of the Border

Missed out on this year’s Rail: North of the Border (RNOTB) Conference and Exhibition? 22 min

Missed out on this year’s Rail: North of the Border (RNOTB) Conference and Exhibition? Quadrant Transport brings you the latest from the crowded event, including exclusive announcements from the Scottish Government and in-depth information on the future of the supply chain as the country moves towards a pipeline-based industry approach

Before Andrew Haines took up the top job at Network Rail back in August 2018, he encouraged every single member of his prospective new senior team to read a book. In Collaboration, Norwegian-American professor and management theorist Morten Hansen argues that the synergies expected from companywide cooperation are rarely, if ever, realised – and proposes a new way forward in what he brands “disciplined collaboration.” Simply put, this is a practical framework and set of tools that managers in any organisation can use to overcome barriers to collaboration, inspire genuine engagement, and nurture nimble yet effective networks across their companies.

“The single message I intended to send was, I hope, pretty clear: my commitment was to lead the team in a way that fostered collaboration, and I was expecting them to respond to the opportunity by behaving collaboratively,” he explained. “And, more fundamentally, that I was committed to Network Rail working much more collaboratively with industry partners.”

There was no better place for Haines to reveal his industry (and literary) secrets than at the inaugural RNOTB Conference and Exhibition. The event – itself the result of three successful RNOTB networking dinners – brought together over 400 people from across the Scottish rail industry to discuss how organisations can best work together in order to achieve the ambitious aims of CP6. The message was clear: simply put, they’re all hellbent on delivering the best railway Scotland has ever had.

Network Rail CEO Andrew Haines

As the Network Rail chief executive put it during his keynote speech at the conference – which took place on 26 March at Glasgow’s Radisson Blu – Scotland has been at the forefront of devolution and collaborative working for quite some time. Their rail top dogs – ScotRail Alliance’s Alex Hynes and Transport Scotland’s Bill Reeve, both also speakers at the event – refer to this phenomenon as ‘Team Scotland.’

Speaking to Bill before the event, I asked him what the term Team Scotland meant to him. “It’s a state of mind and a way of working,” he pointed out. “It’s not a formal organisational structure, but we recognise in Scotland that the railway is a system and needs to be managed as such. Its development needs to be coordinated as a system. If you don’t understand that and don’t think like that, horrible things can happen. We can probably think of a number of horrible things that have happened in recent years which show what that lack of system thinking can lead to.”

Ominous enough. But what does this translate to in practice?

“We believe in working in partnership with our suppliers and our delivery partners in the rail industry,” Bill continued. “Team Scotland is certainly Transport Scotland and the ScotRail Alliance, which comprises Network Rail Scotland and ScotRail, but it also includes our other TOC (Caledonian Sleeper), suppliers, and the ORR, which has an office in Glasgow. It represents our belief that, in doing and approaching matters in that way – and ensuring that we have aligned objectives which are shared with our delivery and development partners – we will stand a much better chance of succeeding than if we behave as disparate organisations limited in our interface by contract.

“At one level, it’s not a formal structure. At another level, you know what? It’s really quite important to the way in which we go about our business.”

David Simpson, ScotRail’s operations director, argued that the very essence of Team Scotland is best encapsulated by the country’s jewel in the crown: the Integrated Control Centre in Springburn, Glasgow, which manages Scotland’s railway on a minute-to-minute basis. “It comprises of ScotRail, Network Rail, Hitachi, British Transport Police, and a range of colleagues from different parts of the network and the industry,” said Simpson during the conference. “You’d be hard-pushed, if you visited it, to know who works for who. It’s very much a joined-up, collaborative arrangement.”

So far, this ethos has had some real tangible benefits. For example, when discussing electrification, Reeve said they’ve been pulling together the right expertise all in one room, irrespective of which organisations they’re from, to talk solutions (and given Scotland’s impressive track record of electrifying on time, one can only assume it’s been working.)

Suppliers play a key part in this, too. “We want our suppliers to feel part of Team Scotland,” Bill assured me, “and we actually have quite a bit of work underway with colleagues in Scottish Enterprise about recognising the importance of the rail industry supply base as a part of the Scottish economy in its own right.”

This message resonated loud and clear during the RNOTB conference, even when it wasn’t Bill himself up on stage preaching it to the jam-packed audience. Speakers from Siemens, Arup, SNC-Lavalin Atkins, HS2 Ltd, Borders Railway, ScotRail, Glasgow City Council, Network Rail, and Transport Focus all got up on stage at one point or another to run through the massive opportunities ahead as suppliers scramble to lock down CP6 deals (many of which are still relatively shrouded in mystery due to the country’s new pipeline-based approach to work.)

At one level, it’s not a formal structure. At another level, you know what? It’s really quite important to the way in which we go about our business.

Unlike England and Wales, though, Scotland has decided not to implement the Open for Business approach. But this is just because they managed to deliver CP5 plans within budget – not because they’re snubbing interested suppliers.

“Network Rail’s Open for Business programme is designed to foster third-party investment and provide a more flexible approach. ScotRail’s delivery of Robroyston station is evidence that we are not just talking about this, but delivering,” Cabinet secretary for transport, infrastructure and connectivity Michael Matheson told me, referencing the scheme’s pioneering multi-stakeholder approach to funding. “Similarly, we can look to the success of Network Rail’s engagement with third-party freight schemes such as the new Highland Spring siding at Blackford.

“The Scottish Government supports the continued development of an effective and efficient supply base for Scotland’s railway, for example by ensuring that the pipeline of projects is regularly publicised. Working together with Network Rail, ScotRail, and other industry bodies, we will ensure that the marketplace is kept fully engaged across the broad spectrum of work opportunities that lie ahead during CP6 and beyond.

“There are approximately 200 known suppliers to the industry in Scotland with a GVA of £668m per year, and over 13,000 people work in the Scottish railway industry and its supply chain,” Matheson added. “That’s a pretty impressive starting point. However, we wish to secure and grow that capability and, accordingly, Scottish Enterprise has been working with industry to promote rail business opportunities, and has established a Scottish Rail Supply Chain Forum to encourage and raise awareness.”

Starting CP6 on a good note

To illustrate such opportunities, the Cabinet secretary took advantage of the conference to announce a brand-new programme of proposed railway projects aimed at sustaining investment in the network (a personal thank you for the scoop, Mr Matheson.) This is essentially a suite of planned schemes that are under consideration, with the mixed aims of relieving overcrowding through the proposed East Kilbride and Barrhead project; improving service reliability to the Scottish Borders and beyond; bettering rural connections on the West Highland and Far North lines; speeding up journeys between cities such as Perth, Aberdeen and Inverness; and tackling environmental issues through electrification and new rolling stock technologies, such as hydrogen and battery power.

Luckily for those present at the Glasgow event, who heard about all of this straight from the horse’s mouth, plans also include a 21% increase in expenditure on the day-to-day running of Scotland’s rail network.

“Through our new projects pipeline, we will address the cost and delivery challenges witnessed in recent years,” Matheson told guests at the Radisson. “It will also give confidence to the rail supply chain, in that it assures a steady stream of work for the next five years.”

This, of course, all follows on from five successful years of prompt delivery during the previous control period, which every RNOTB speaker ran through in evident pride of the country’s accomplishments. Thanks to a weekly expenditure of £16m, the rail industry up in Scotland has delivered a series of electrification schemes (most recently, Shotts – on time and to budget), upgraded key stations and outlined plans for new ones, rolled out brand-new electric Hitachi trains, started refurbishing the existing fleet, slashed journey times between Edinburgh and Glasgow, increased the amount of services to 2,400 a day, submitted plans for performance improvement… the list goes on. But as Hynes put it, in order to remain competitive and meet rising customer expectations, they must do more still.

His Network Rail colleague, Andrew Haines, explained this challenge succinctly: “I love the rail industry, but one of the things that does get me down sometimes is that it’s awash with horror stories and anecdotes and, frankly, can sound rather sorry for itself,” he admitted. “Our challenges are ones that colleagues in other sectors would die for. They’re fundamentally a challenge of growth.”

Central to this growth conundrum will be more extensive decentralisation of powers. Despite already being at the forefront of Network Rail’s devolution for some time, Scotland will receive, over the coming months, more targeted control over a significant part of the System Operator and key business areas, such as infrastructure projects and critical engineering issues. “This gives us an excellent opportunity to build on the relationships we already have to create stronger, more aligned and integrated organisations with shared aims and objectives,” said Haines. “By bringing core functions such as planning and delivery closer to end users, funders and partners, I believe we can change the way we work.”

Alliancing alone will not suffice; the Network Rail boss claims it’s lazy thinking to suggest that this can solve all our problems. Internal collaboration will also not do the trick by itself. Every part of the business, including the supply chain, will have to come together to learn from each other as true partners. “Train operators, for example, are often at the sharp end of the passenger relationship,” explained Haines. “It was literally possible to hear jaws drop to the desk when Liam Sumpter, who has recently joined the Network Rail Scotland team [as COO] from Northern Trains, told some of our colleagues at Network Rail about the realities of working in a TOC. The level of financial pressures; what it’s like to be on the receiving end of feedback in an age of unbridled social media.

If all that sounds cosy and warm, then you are misunderstanding my purpose and intent. It would be a radical challenge to everyone involved in the sector

“Too many of our colleagues have been too isolated from what it’s like to be part of delivering frontline customer service, and as a consequence we lose some of our ambition, some of our determination, and some of our commitment to deliver on our promises. Operators have increasingly challenging contracts to deliver, with very little margin for error. They have to be agile and responsive to survive. And so must we.”

The chief executive, whose arrival at the infrastructure owner last year was warmly welcomed by many in the sector who yearned for deeper change, went on: “I’m very passionate about a new approach being needed. One that’s focused on delivering for the users of today and tomorrow. Where the choice of which decision to make or which path to take is guided decisively and emphatically by the answer to the overriding question: what is in the users’ best interests?

“If all that sounds cosy and warm, then you are misunderstanding my purpose and intent. It would be a radical challenge to everyone involved in the sector – from service specifiers and funders to train operators, Network Rail, and the supply chain. A fundamental challenge to our behaviours, our contracts, our practices, and how we use our very best people. But we can do it. We already do it now – we just need to do it more consistently.”

Putting technology into context

Haines’ energising opening speech set the precedent for a string of discussions – both on stage and off, in and around the 40 exhibitor stands peppered throughout the conference space – on how best to achieve this required level of collaboration.

Scott Kelley, rail market director at Atkins, took advantage of his speech to assure the audience he is in “no doubt that we’re entering a period of change and opportunity as we look to deliver rail projects in new and exciting ways by working together, embracing technology, challenging convention, and resetting our focus as an industry.”

“Right here, right now, we have a golden opportunity. As an industry, we’ve never been better placed to start to meet the expectations of rail and freight users. Investment is at record level; the CP6 funding settlement for Network Rail, along with the investment in HS2 and the regional metropolitan rail, gives us a fantastic opportunity to showcase the future direction of our railways. Network Rail’s continued devolution also gives the potential for more localised decision-making and further reinforces the Scottish delivery model as the model for the rest of the UK,” Kelley went on.

“Alongside this, we’re seeing the technology revolution continue, blurring the lines between physical reality and virtual reality. For the likes of Atkins, as a designer, technology has opened the door to data-driven, tech-enabled design, transforming the way we can see and deliver infrastructure. The possibilities of data-driven design are genuinely endless.”

Technology was, in fact, one of the main debates of the day, with Arup digital advisory leader David Moran offering a down-to-earth assessment of what digitisation can and can’t do. “We sometimes equate innovation with some mobile app or some cool tool. But how many of you in the audience are more preoccupied right now about simply completing one of your more challenging projects on time and to budget?” he asked delegates. “I’m guessing most of you. Sometimes it’s easy to fall into the trap of chasing after the next silver bullet to solve a problem, or even worse, to think: ‘Wouldn’t it be great if we could just get the job done without all this new tech, this stuff that nobody understands – not even the suppliers?’

Sometimes it’s easy to fall into the trap of chasing after the next silver bullet

“In an ideal world, technology should help us deliver projects faster, better, and cheaper. For sure, without new innovation in technology, we would certainly fall way short of achieving anything like the ambitious plans we have for the industry for the next five years,” David carried on. “Of course, I definitely want to promote Arup’s credentials in successful delivery; you’d expect me to. But I also have to admit to being in a fair few tech-related scrapes myself over the years, just to lend some credibility to when I say: there are common themes that really need to come to the fore at some of the low points.

“It’s known from the outset that what we want to achieve is breathtaking and bold. And of course, the larger these projects are, the more likely they are to have problems. They often involve the introduction of leading-edge technology, or technology that worked perfectly well in a lab but seems to fall short when introduced in the field. And we all know from our own personal experiences with email, dial pads, or phones, that even small-scale technology doesn’t work very well all the time – let alone big technology.

“We have to dig deeper than just superficial apps and cool dashboards. We have to get to the core essence of the problem, and look for new ideas, and good ideas, that get to the heart of what organisations are trying to achieve.”

Campbell Braid, project director at Siemens, agreed with him. In his speech, the Scottish rail expert pointed out: “When we talk about early involvement, it’s all about how we create an optimum solution from the outset. It’s how we deploy technology early to add value – and it’s important that it does need to add value. It’s not just about Campbell Braid selling Westlock; it’s about adding value.

“It’s about innovation allowing technology to work for us, and it’s about delivering the right technology for what the customer wants. That’s key. We’ve had some grown-up discussions he past few weeks about that, but we must now get better at offsite testing.

“And then when we talk about leaving a legacy, we seek to deliver more than just projects. Our path to competitive and accelerated delivery is underpinned by this. I hope we can leave a lasting positive impact through many different forms – new technology, jobs and skills, social work, supporting and enhancing local economies, environmental sustainability, passenger experience improvements… Ultimately, it’s about what’s in it for the end passenger.”

Opening the door to SMEs

It’s no surprise that, during a supplier event with 400 delegates present, the subject of SMEs quickly came up. Already expecting this to be a centrepiece of the day’s discussions, I asked Michael Matheson whether he thought his government was doing enough to embrace smaller companies in the industry.

His answer was clear: “We recognise that Scotland has a relatively small number of businesses which are rail-focused, and a much greater number which supply the sector but for whom it is not their primary focus. We want to grow this sector to develop skills and high-value employment, and to promote export opportunities as well as to increase tax receipts for Scotland so that we have more funds available for investing in essential infrastructure.

“That is why we’re pressing Network Rail to change its procurement approach away from GB-level frameworks to more locally-focused procurement, to afford SME suppliers based in Scotland the opportunity to bid. Our HLOS stresses the importance of developing a supply base in Scotland to meet our steady work banks.

“Rail is about the operation of a complex system requiring construction skills, civils, mechanical and electrical engineering, IT, process control, design, maintenance, people and service management, and disposal of assets at the end of life. Construction and upgrading of the railway creates high-value, skilled jobs, as does the ongoing maintenance of infrastructure and the trains.”

Further, Matheson said his government has encouraged the country’s two franchisees to use smaller companies in order to spread the benefits of rail investment. Scottish Enterprise has been leading on this ambition by highlighting existing opportunities and encouraging companies of all disciplines to engage with the industry’s decision-makers. “Of course, the way for any company to stand out is to focus on quality, cost, and control,” he hastened to add. “Get those right and the rest will generally follow.”

In my conversation with him prior to the conference, Bill Reeve seemed to agree that attracting Scottish suppliers is the way forward – not because others aren’t welcome, but because “it helps if the resources are here [in Scotland] and that the people responsible for supplying it understand Scottish-specific objectives.” “And we do have different objectives, different priorities, different requirements, different approaches to the railway south of the border,” he noted. “That’s what devolution is all about.”

Bill also told me that his organisation is working closely with Network Rail to understand how certain supply barriers can be rectified or facilitated. For example, an awful lot of what the infrastructure owner does – station projects, for example – are schemes that Tier 2 contractors would be able to take on. But at the moment, these opportunities aren’t being made available to them.

Of course, the way for any company to stand out is to focus on quality, cost, and control. Get those right and the rest will generally follow

In his speech, HS2 Ltd’s Tom Kelly, strategic director for stakeholder engagement, described the stride towards local supplier engagement that is already taking place as part of the giant high-speed scheme. According to Kelly, despite still in its relative infancy, HS2 is “already contributing to the Scottish economy through the supply chain represented well here today [at the conference].”

“Twenty-five Scottish companies are already working with us. Whole Life Consultants from Dundee is doing things like analysing our future skills needs, while we have others in more traditional engineering roles. And that presence will keep growing and will be increasingly obvious as we go through the present direct and indirect workforce of 7,000 to 30,000 at peak,” Tom explained.

“We intend to use that growing presence not just to drive technical innovation, but also to raise the diversity in our industry – whether it’s in terms of gender, ethnicity, sexual orientation, or working practices. The physical railway isn’t the only thing that needs to move into the 21st century.”

Keeping up with the pipeline

For suppliers of any size, large or small, to get involved and help transform the railway, they will have to abide by the country’s new Rail Enhancements & Capital Investment Strategy (RECIS) – a change that, according to Network Rail Scotland head of strategic planning Catherine Hall, applies to everyone, not just her organisation. The strategy essentially looks beyond traditional five-year planning cycles and instead proposes a pipeline approach to funding. New rail project ideas will have to make use of the Scottish Transport Appraisal Guidance where government funding is required.

“We’re having to establish a pipeline from scratch within Scotland, and it’s quite a challenging task,” Catherine noted at the event. “There are a number of key areas on which we need to focus to make sure we do this robustly. First of all, we need to ensure that it aligns with Scottish Government priorities for journey time, connections, reduced emissions, improved accessibility and affordability – and we are doing that.

“We are also taking a whole-system approach: we’re not just looking at what infrastructure needs to be built – we’re looking at the way outcomes could be delivered. Perhaps it’s an infrastructure solution, perhaps it’s a rolling stock solution, or perhaps it’s a combination of the two… we are making sure that infrastructure and trains are linked to the whole-system approach. But more than that, we’re also looking at how the railway can then integrate with other forms of transport to make sure that passengers have a seamless public transport offering.”

Catherine Hall, head of strategic planning, Network Rail Scotland

Hall’s team are also developing corridor strategies, providing a long-term view of what each corridor might need in the next few decades – which will then be split into packages that are both affordable for funders and which provide incremented benefits to passengers and freight users. In practice, this means people won’t just see a junction being remodelled and then not actually feel the benefit during their day-to-day commute.

“We’ve also made sure that we used the corridor approach because a number of the assets have very low lives, so we need to make sure that whenever we’re renewing them, we’re renewing them for what is needed in the future – not just for the next five-year cycle,” Catherine explained.

“And finally, we’re undertaking portfolio management: programme management for the individual projects, but then looking at it as a whole portfolio. It’s no longer a list of sites. That allows us to divide the supply chain with greater visibility, to provide smoother work banks to the supply chain, and also to ensure integrated decision-making.”

In his conversation with me, Matheson hailed the RECIS and the changes that came with it as “moving away from a rigid regulatory control-period approach, where we had to commit to projects before they were properly scoped.” Instead, suppliers will have access to a continuous pipeline of projects rolling into the marketplace.

“This revised approach will allow Scotland’s communities and rail users to better influence the shape of the proposed projects and improvements,” said the Cabinet secretary. “In CP6, potential investments will only be progressed when the business case is fully developed and there is greater certainty on price, affordability, and the capacity of the rail industry supply chain to deliver. This will be supported by the new Team Scotland approach.

“Whilst the 30-year plan proposed by the Scottish Infrastructure Commission is a welcome step forward, the pipeline approach already adopted by the rail industry in Scotland will also assist suppliers greatly in their business planning. Both of these aspects together will help contribute to sustainable economic growth, benefitting suppliers across the country. This will encourage new businesses and also maintain and stimulate existing ones.”

Matheson expects that even more positive change could be on the horizon as a result of the Keith Williams Review, which he hopes will deliver “significant and positive change for Scotland’s railways,” ideally by recommending full devolution of powers to ensure track and train are properly integrated. But until then, it’s not a case of wait and see; Scotland is ready to get up and go.

The next RNOTB networking dinner will take place on 5 September at Radisson Blu. Speakers already confirmed include Alex Hynes of ScotRail Alliance, Liam Sumpter of Network Rail Scotland, and former transport minister Tom Harris of the Williams Review expert challenge panel.

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