New framework signalling contracts governing the next ten years will introduce industry stability, improve efficiency and reduce costs.
Three framework contracts have now been decided, for Renewals and Enhancements, ERTMS, and Traffic Management. Between them they cover most of Network Rail’s planned signalling projects for the next decade.
Renewals and Enhancements Framework
The first framework contract awarded, and probably the largest, with an estimated total value of £1.5 billion over seven years, was placed in January and split between Signalling Solutions Limited (SSL), Atkins and Invensys respectively. Starting in April and working under a national framework the contractors will deliver signalling replacement and renewal work throughout the network.
The framework will allow the contractors to make long-term efficiency savings and these will be passed on to Network Rail. In essence the new framework agreements form the backbone of Network Rail’s programme to modernise and maintain safety-critical railway signalling systems. Framework agreements are designed to deliver the efficiency savings required across the company’s signalling work over the next seven years through further reductions in unit costs.
Contracts for specific work will be awarded under the three framework agreements. Says Mark Southwell, Network Rail’s Project Director (Signalling), ‘We intend to work in partnership with our suppliers. This will smooth out the peaks and troughs that normally occur in the business, allowing us to plan a more constant workload for our suppliers.’
The framework is split down into eight geographical areas, with each area having a primary and secondary supplier. Normally, the primary will do all the work in that region, but if it is unable to do a job for any reason, such as lack of capacity, then the secondary contractor will be asked to step in.
The stability created by framework agreements anticipated the recent McNulty report on delivering a better value railway. Says Southwell, ‘Network Rail knew it had to drive through efficiencies long before McNulty’s report came out, as the regulator had set us a target of delivering a 24% efficiency improvement in the current five-year control period. The McNulty report highlighted the challenges we face, and focussed thinking on the need to reduce costs, but this programme was already underway, as are other similar projects.’
Signalling Solutions Limited (SSL), Atkins and Invensys will share the work on a geographical basis as shown in the table.
The joint venture company of Signalling Solutions (SSL) was formed in 2007. Alstom had been a supplier of signalling technology to the railway industry for years, but in a first attempt at rationalisation Network Rail had suggested that Alstom signalling in the UK should have turnkey capabilities, including installation and testing.
Looking around the market, a best match was found in Balfour Beatty Rail, which at the time was looking for a technology partner in order to maximise the potential of its project management and delivery skills. A joint venture – Signalling Solutions Ltd – was formed and is based at Alstom’s Borehamwood plant and Balfour Beatty’s Derby offices.
Says Steve McLaren, Managing Director of SSL, ‘Network Rail was very supportive. Having pushed Alstom to make the change, we then very quickly received a couple of contracts so we could put the combined team into action. The extensive knowledge, experience and capability of both organisations, in terms of technology, design, engineering, project management, installation and testing, form the basis of SSL today.’
With a current annual turnover of £80-90 million, what will the new framework mean to SSL? ‘Security,’ says Steve. ‘The ability to plan a long-term workload and to retain good people. We have reinstated our graduate training programme, and are also taking on apprentices. We are trying to make SSL an attractive business to join – and the safest. Did you know we haven’t had a RIDDOR accident for three years?
We also plan to invest in new technologies and tools to do things smarter and even safer. Generic technology R&D will continue to be done by Alstom. Where necessary SSL shall adapt that to the UK market. It is essential to keep introducing new technology into the UK and maintain a healthy portfolio, for our business and most importantly for the benefit of our customers.’
John Martin is Regional Programme Director for Atkins, and the bid director for the new signalling framework. ‘We don’t have any product of our own,’ he says. ‘That means we are not tied to a product line so we can choose the best. We can drive innovation forward and come up with the best engineering solution to suit the client – it gives us more flexibility.’
Atkins has been delivering major signalling contracts since the 1990s. ‘The three companies involved are the three most successful in the market. Invensys is probably the biggest, and SSL has been successful recently due to its Smartlock product. So in terms of market share there probably is no big change,’ says Martin. ‘However, this contract will make us all more efficient. We will be able to cut down on tendering costs, and there will be economies of scale in various areas. Above all there will be stability which will give us the incentive to develop new technologies.’
Perhaps the largest of the three suppliers in terms of the UK market, is Invensys. Says William Wilson, Commercial Director, ‘Looking at the split of regions, and the work we know is coming up, we think we have approximately half of the market – that’s our best guess.’
Invensys is a technology company, although it has its own project managers and deputies. Installation is conducted using agency staff under Invensys direct management. Testing is carried out by a mix of in-house and agency teams.
The new framework agreement will give the company the confidence to invest more in R&D. ‘The real benefit to us is stability. It will allow us to enter into longer-term partnership agreements, and pass that stability down the line. And as most of our products are made in the UK, it will give more security to our British manufacturing workforce.’
McLaren, Martin and Wilson all agree the new framework will stabilise the rail supply industry and secure good efficacy and cost savings. The scene is set for the most dramatic change in railway signalling since the original introduction of semaphore signals on the original metals.
The European Rail Traffic Management System is a pan-European initiative which will eventually replace all lineside signals. Drivers will work from a screen in the cab, which communicates with the control centre by radio. ERTMS has been installed on the Cambrian Line in Wales and will eventually be rolled out nationally under a second new framework agreement.
The ERTMS framework has been awarded to four concerns; Invensys Rail, Signalling Solutions, Infrasig (a Carillion / Bombardier joint venture) and Ansaldo STS. All have experience in ERTMS installations elsewhere. Ansaldo STS was responsible for converting the Cambrian Line.
Network Rail’s medium-term goal is to install ERTMS on three major routes, the Great Western, the East Coast Main Line and the Midland Mainline. The new framework contract is for a one year period to help define the specification of the ETCS (European Train Control System) component of the system.
At the end of the first phase, likely to be in around 9-12 months time, Network Rail will assess the technical and commercial proposals that each company has put forward and ask a number of them, probably three, to demonstrate their proposals using a test installation on the Hertford Loop. This is a double-track, 24 mile loop off the East Coast Main Line between Stevenage and Alexandra Palace.
Commuter trains will be restricted to a single line over a 5.5 mile stretch, freeing up the other line for use as an ERTMS test track. Starting in 2013, the chosen firms will be asked to demonstrate their ETCS solutions, one after the other, over a twelve month period.
Main line implementation
Following these trials, the best solutions will be chosen to be installed on the Great Western and East Coast Main Line. Says Guy Stratford, Head of Contracts and Commercial at Network Rail, ‘We will have as much flexibility as possible at this stage. It is possible that one company will be head-and-shoulders above the others, but we will have to bear in mind the logistical difficulties of one organisation working on two major projects at once.’
Work is likely to start in 2014, with the Great Western coming on stream first (commencing 2016) followed by the East Coast Main Line (2018) and the Midland Mainline (2020).
Traffic Management Framework
The third, and most recent, piece in the jigsaw is the Traffic Management framework. Based at control centres the new systems will control all aspects of the railway’s operations.
When Network Rail first outlined its requirements in 2010, over sixty suppliers from around the world expressed an interest. For nine months, discussions took place with these companies which allowed Network Rail to understand what systems in other countries were able to offer, and to learn best practice.
As a result, the list of potential suppliers has been whittled down to only three. Contracts will be formally awarded next month, but RailStaff understands that the selected suppliers will be Thales, Hitachi and Signalling Solutions. These companies will be asked to produce a new system working with the Traffic Management Users Group.