Construction must play part in setting up investment programme, says Strategic Rail Authority head.
The Strategic Rail Authority has appealed for construction industry advice over how to structure £29bn of public investment in the rail network over the next 10 years.

SRA chief executive Mike Grant said that as Railtrack had decided not to lead many of the public–private partnership upgrade projects, the authority needed help to formulate its procurement strategy.

He denied that the authority had stipulated that the improvements should be financed through PPPs in order to load risk onto the private sector.

Rather, he said, the SRA wanted to reach a consensus about which were the most appropriate parties to shoulder risk.

He said: "It's dead easy, when you are a government organisation, to say: 'If you want that contract, you have to take this risk.' I don't believe that's the right way to do it. What we have to say is: 'What are those risks and who are the best people to shoulder them?' If they are not, the project will get priced inefficiently and it won't work well."

The SRA, which came into operation in February, will publish its strategy to improve the network's capacity and performance in November.

Grant said it would ensure that, in future, more time and resources were spent on defining the project brief of PPPs. The aim would be to avoid the cost and time overruns that have dogged large projects such as the £6.3bn West Coast Main Line upgrade.

He said: "The root of the problem is definition. You need to make sure enough work is done in feasibility pre-design, so people are aware of what is needed."

He added: "You have to try and get the private sector in as early as possible, but not at the expense of lack of definition."

The SRA proposed in March that the £60bn programme of rail enhancement, the biggest PPP in Europe, could be led by "special purpose vehicles". These could be joint ventures between train operating companies and contractors, rather than Railtrack – although Grant now says that these groupings "could and should" include Railtrack. The investment includes £31bn of private sector cash.

He said: "We have not defined exactly what the structure will look like. It is massively complicated because the projects are at every stage of consideration."

Grant said a rail industry steering group, including the SRA, Railtrack, the train operating companies and contractors, was meeting every six weeks to discuss how to improve procurement.

  • The Strategic Rail Authority last week tendered for firms to design, build, finance and maintain the £300m East London Line extension in the European Union's Official Journal.