2. The Hansford Review
Unlocking rail investment –
building confidence,
reducing costs
Professor Peter Hansford, FREng FICE FAPM
University College London
3. Overview
• Independent review of contestability
• Builds on transformation already underway in Network Rail
• Aimed at enabling better value infrastructure projects
• Focused on creating confidence for wider investment in rail
infrastructure
5. Removing barriers (chapter 3)
• Lack of ownership for contestability
• Lack of visibility of a pipeline of third party projects
• Network Rail roles and behaviours
• Inappropriate risk transfer
• Standards and scope control
• Asset protection agreements
• Complexity of business cases and funding agreements
8. Delivering more value for money (chapter 6)
Recommendation 1: Alternative delivery models
Network Rail to develop and embed processes and specialist commercial
capability consistently within the routes to establish and execute a range of
alternative design and delivery options for infrastructure projects.
Recommendation 2: Efficiency gains
Network Rail to demonstrate its commitment to creating a more
contestable market and evaluate resulting gains.
9. Broadening third party investment (chapter 7)
Recommendation 3: Contestability decision process
Network Rail in conjunction with government to develop clear, transparent
principles and processes for considering contestability at each investment
decision stage.
Recommendation 4: Appraisal methodology
Government to ensure that it gives due consideration to contestability in its
business case methodology, and to publish appraisal guidelines to assist
third parties to realise financial benefits associated with rail infrastructure
projects.
Recommendation 5: Early development fund
Government to establish an early development fund with clear criteria to
assist in the creation of high quality investment proposals.
10. Broadening third party investment (chapter 7)
Recommendation 6: Forward view of investment opportunities
Network Rail in conjunction with government to create and maintain a
forward view of the scale of third party investment opportunities, giving
visibility and confidence to the market.
Recommendation 7: Pathfinder projects
Network Rail in conjunction with government to identify a range of
pathfinder projects to demonstrate the removal of barriers and the benefits
from alternative funding and delivery models.
11. Enabling third party projects (chapter 8)
Recommendation 8: Roles and accountabilities
Network Rail to define roles and accountabilities, build capability and
provide support to the routes for engaging with third party investors
(funders and deliverers); and to define the respective accountabilities of the
routes and Network Rail Infrastructure Projects directorate.
Recommendation 9: Culture and behaviours
Embed within Network Rail’s transformation programme the behavioural
changes required to create a welcoming, predictable and trusting
environment, providing more cost and risk certainty.
12. Enabling third party projects (chapter 8)
Recommendation 10: Terms of engagement
Network Rail to convert its Code of Practice into a Service Level Agreement,
refreshing its template agreements, asset protection agreements and
guidelines reflecting a more balanced risk transfer, in consultation with
industry.
Recommendation 11: Challenge of scope and standards
Create a transparent process to enable and facilitate third party challenge
of scope and standards application during project development, fixing them
before funding commitments are made.
13. Oversight arrangements (chapter 9)
Recommendation 12: Oversight
Establish effective oversight arrangements to provide strategic direction
for a more contestable rail infrastructure market, building on existing
Network Rail governance structures and involving government as
appropriate.
14. Takeaways from today - 1
Appetite in private sector to invest in infrastructure, but
difficult to deal with monopoly owners
Need to:
• reduce complexity
• provide clear process and pathway
• build confidence with investors
Contestability of part reduces cost of whole
15. Takeaways from today - 2
One of the five foundations of productivity in the new
Industrial Strategy, Building a Britain fit for the future is a major
upgrade to the UK’s infrastructure
This needs significant private investment, alongside public
Achieving this requires:
• unlocking infrastructure investment
• building confidence
• reducing costs
16. The Hansford Review
Unlocking rail investment –
building confidence,
reducing costs
Professor Peter Hansford, FREng FICE FAPM
University College London
www.thehansfordreview.co.uk